Brazoria County Appraisal District

20162017 Reappraisal Plan

Our mission as public servants is to demand excellence in the services provided to the taxpayers and taxing jurisdictions ofBrazoria County The districts goal is to efficiently and timely produce an accurate complete and equitable appraisal roll The intent ofthe policies and procedures ofthe district is to bring about the highest possible degree ofunderstanding

cooperation dependabiityjlexibiity andfunctionality which managing critical data in dynamic situations

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RESOLUTION NO 2016-2017

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BRAZORIA COUNTY APPRAISAL DISTRICT APPROVING AND ADOPTING

THE 2016-2017 REAPPRAISAL PLAN

WHEREAS the Texas Tax Code obligates the Board of Directors of the Brazoria County Appraisal District to adopt a written plan for the periodic reappraisal of all properties within the districts boundaries and

WHEREAS Texas Tax Code Section 605 expressly requires the Board of Directors to complete all hearings amendments and resolutions necessary for the plans adoption no later than September 15th of each eligible year and

WHEREAS the Board of Directors believes the adoption of the proposed reappraisal plan as submitted for years 2016-2017 is in the interest of the public

NOW THEREFORE BE IT RESOLVED AS FOLLOWS

The Board of Directors of the Brazoria County Appraisal District hereby adopts the attached 2016-2017 reappraisal plan as submitted to be implemented by the Brazoria County Appraisal District

PASSED APPROVED AND ADOPTED this the 13th day of September 2016

ATTEST

ectors Brazoria County Appraisal District

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TABLE OF CONTENTS

PREAMBLE 4

THE BASICSCONSTITUTIONAL STANDARDS 7

HOW DOES THE SYSTEM WORK 8

EXECUTIVE SUMMARY 10

REQUIREMENTSASSUMPTIONSLIMITING CONDITIONS 10

OVERVIEW 12

TAX CODE REQUIREMENT 16

RATIO STUDIES GUIDELINES 20

USE OF FORECLOSURES 22

PTAD RATIO STUDY 22

PLANNED ACTIVITIES 23

ANALYSIS PLANNING AND ORGANIZATION 25

MASS APPRAISAL UPDATING SYSTEM 27

PLANNED REAPPRAISAL 29

REAL PROPERTY ESTIMATES 34

OTHER APPRAISAL TYPE OVERVIEW 34

EQUITABLE amp UNIFORM ANALYSIS 38

VALUE DEFENSE OVERVIEW 39

MASS APPRAISAL REPORT REFERENCE 40

LIMITING CONDITIONS 41

MASS APPRAISAL FLOW CHART 42

43BCAD 2016-2017 APPRAISAL CALENDAR

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PREAMBLE

The Brazoria County Appraisal District (BCAD) is a political subdivision of the State of Texas created effective January 1 1980 The provisions of the Texas Property Tax Code govern the legal statutory and administrative requirements of the appraisal district A member board of directors appointed by the taxing units within the boundaries of Brazoria County constitutes the districts governing body The chief appraiser appointed by the board of directors is the chief administrator and chief executive officer of the appraisal district Currently the chief appraiser reports to the following board of directors

Title Member

Chairperson Glenn W Salyer Vice-Chairperson Gail Robinson Secretary Rubye Jo Knight Member Tommy King Member Susan Spoor Tax Assessorshy RoVin Garrett Collector

Appraisal districts are political subdivisions of the state and are responsible for appraising all property subject to taxation in Texas Unless otherwise provided by law appraised values are required to represent market value as of January 1st of each year In addition appraisal districts are required to reappraise all property at least once every three years but may have to reappraise more often to ensure that values represent market value as of January 1 each year It has been the practice of the Brazoria County Appraisal District to annually reappraise the market value of all properties in our district

The appraisal district is responsible for local property tax appraisal and exemption administration for 76 jurisdictions or taxing units in the county Each taxing unit such as the county a city school district municipal utility districts etc sets its own tax rate to generate revenue to pay for such things as police and fire protection public schools road and street maintenance courts water and sewer systems and other public services Appraisals established by the appraisal district allocate the years tax burden on the basis of each taxable propertys January 1st market value The appraisal district also determines eligibility for various types of property tax exemptions such as those for homeowners the elderly disabled veterans and charitable and religious organizations

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BCAD has eight school districts within the county boundaries Angleton ISD has approximately 10244 improved residential real property parcels 718 commercial parcels Pearland ISD has approximately 28699 improved residential real property parcels 1053 commercial parcels Alvin ISD has approximately 29517 improved residential real property parcels 1436 commercial parcels Brazosport ISD has approximately 19024 improved residential real property parcels 1513 commercial parcels other school districts include Danbury Damon Sweeny and Columbia Brazoria which have approximately 13560 improved residential real property parcels 801 commercial parcels BCAD appraises approximately 11776 lease and business personal property accounts BCAD also maintains approximately 3100 industrial accounts through contracted appraisal services An allocation of appraisal staff to parcel ratio is submitted annually to the chief appraiser for consideration

Cities are Alvin Angleton Brazoria Village of Brookside Clute Danbury Freeport Holiday Lakes Hillcrest Village Jones Creek Lake Jackson Liverpool Manvel Oyster Creek Pearland Quintana Iowa Colony Village of Baileys Prairie Richwood Village of Surfside Sweeny and West Columbia

The Office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations and the oversight of each departments functions The Appraisal Department is responsible for the valuation of all real and personal property accounts The appraisal divisions include commercial residential business personal and industrial The districts appraisers are subject to provisions of the Property Taxation Professional Certification Act and must be duly registered with The Texas Department of Licensing and Regulation

Brazoria County Appraisal District adheres to a state mandate requiring the application of the principles and practices set forth by Uniform Standards of Professional Appraisal Practice (USPAP) The purpose of USPAP is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers It is essential that appraisers develop and communicate their analyses opinions and conclusions to intended users of their services in a manner that is meaningful and not misleading

The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services The appraisers responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical

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obligations on those who serve in this capacity USPAP reflects the current standards of the appraisal profession

USPAP does not establish who or which assignments must comply Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make judge or enforce law Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation USPAP addresses the ethical and performance obligations of appraisers through Definitions Rules Standards Standard Rules and Statements

bull The DEFINITIONS establish the application of certain terminology in USPAP

bull The ETHICS RULE sets for the requirements for integrity impartiality objectivity independent judgment and ethical conduct

bull The COMPETENCY RULE presents pre-assignment and assignment conditions for knowledge and experience

bull The JURISDICTIONAL EXCEPTION RULE preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction

bull The SUPPLEMENTAL STANDARDS RULE provides the means for government agencies government sponsored enterprises and other entities that establish public policy to augment USPAP

bull The TEN STANDARDS establish requirements for appraisal appraisal review and appraisal consulting service and the manner in which each is communicated

bull STATEMENTS ON APPRASIAL STANDARDS clarify interpret explains or elaborates on a Rule or Standards

bull COMMENTS are an integral part of USPAP and have the same weight as the component they address These extensions of the DEFINITIONS RULES and STANDARDS RULES provide interpretation and establish the context and conditions for application

The appraisal ofproperty for property tax purposes is required by the Texas Constitution and statutory law (Article VIII Sec l(b) In addition Section 2602 of the Texas Property Tax Code states that all property shall be appraised at 100 of its market value Finally Section 403301 of the Government Code ensures equity among taxpayers in the burden of taxes and among school districts in the distribution offinancial aidfor public education This subchapter provides for uniformity in local property appraisal practices and procedures and in the

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determination of property values To effectively administer the code the comptroller conducts a bi-annual study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in the districts boundaries

THE BASICS

Property taxes are local taxes Local officials value your property set your tax rates and collect your taxes However Texas law governs how the process works

In Brazoria County property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property The valuation or appraisal process which is performed by the Brazoria County Appraisal District serves to allocate the tax burden among property owners The property tax provides more tax dollars for local government services in Texas than any other source Property taxes help pay for public schools city streets county roads police fire protection and many other services

CONSTITUTIONAL STANDARDS

The Texas State Constitution sets out five standards for the property tax

1 Taxation must be equal and uniform All property must be valued and taxed in an equal and uniform manner This provision which is an equity standard helps ensure that no single property or type of property pays more than its fair share of taxes

2 With some exceptions all tangible property must be taxed on its January 1 market value The exceptions include certain agricultural timber and recreational park and scenic land subject to special appraisal A propertys market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell

3 All property is taxable unless federal or state law provides an exemption for it An exemption excludes all or part of a propertys value from taxation

4 Property owners have a right to reasonable notice of increases in appraised property values

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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RESOLUTION NO 2016-2017

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BRAZORIA COUNTY APPRAISAL DISTRICT APPROVING AND ADOPTING

THE 2016-2017 REAPPRAISAL PLAN

WHEREAS the Texas Tax Code obligates the Board of Directors of the Brazoria County Appraisal District to adopt a written plan for the periodic reappraisal of all properties within the districts boundaries and

WHEREAS Texas Tax Code Section 605 expressly requires the Board of Directors to complete all hearings amendments and resolutions necessary for the plans adoption no later than September 15th of each eligible year and

WHEREAS the Board of Directors believes the adoption of the proposed reappraisal plan as submitted for years 2016-2017 is in the interest of the public

NOW THEREFORE BE IT RESOLVED AS FOLLOWS

The Board of Directors of the Brazoria County Appraisal District hereby adopts the attached 2016-2017 reappraisal plan as submitted to be implemented by the Brazoria County Appraisal District

PASSED APPROVED AND ADOPTED this the 13th day of September 2016

ATTEST

ectors Brazoria County Appraisal District

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TABLE OF CONTENTS

PREAMBLE 4

THE BASICSCONSTITUTIONAL STANDARDS 7

HOW DOES THE SYSTEM WORK 8

EXECUTIVE SUMMARY 10

REQUIREMENTSASSUMPTIONSLIMITING CONDITIONS 10

OVERVIEW 12

TAX CODE REQUIREMENT 16

RATIO STUDIES GUIDELINES 20

USE OF FORECLOSURES 22

PTAD RATIO STUDY 22

PLANNED ACTIVITIES 23

ANALYSIS PLANNING AND ORGANIZATION 25

MASS APPRAISAL UPDATING SYSTEM 27

PLANNED REAPPRAISAL 29

REAL PROPERTY ESTIMATES 34

OTHER APPRAISAL TYPE OVERVIEW 34

EQUITABLE amp UNIFORM ANALYSIS 38

VALUE DEFENSE OVERVIEW 39

MASS APPRAISAL REPORT REFERENCE 40

LIMITING CONDITIONS 41

MASS APPRAISAL FLOW CHART 42

43BCAD 2016-2017 APPRAISAL CALENDAR

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PREAMBLE

The Brazoria County Appraisal District (BCAD) is a political subdivision of the State of Texas created effective January 1 1980 The provisions of the Texas Property Tax Code govern the legal statutory and administrative requirements of the appraisal district A member board of directors appointed by the taxing units within the boundaries of Brazoria County constitutes the districts governing body The chief appraiser appointed by the board of directors is the chief administrator and chief executive officer of the appraisal district Currently the chief appraiser reports to the following board of directors

Title Member

Chairperson Glenn W Salyer Vice-Chairperson Gail Robinson Secretary Rubye Jo Knight Member Tommy King Member Susan Spoor Tax Assessorshy RoVin Garrett Collector

Appraisal districts are political subdivisions of the state and are responsible for appraising all property subject to taxation in Texas Unless otherwise provided by law appraised values are required to represent market value as of January 1st of each year In addition appraisal districts are required to reappraise all property at least once every three years but may have to reappraise more often to ensure that values represent market value as of January 1 each year It has been the practice of the Brazoria County Appraisal District to annually reappraise the market value of all properties in our district

The appraisal district is responsible for local property tax appraisal and exemption administration for 76 jurisdictions or taxing units in the county Each taxing unit such as the county a city school district municipal utility districts etc sets its own tax rate to generate revenue to pay for such things as police and fire protection public schools road and street maintenance courts water and sewer systems and other public services Appraisals established by the appraisal district allocate the years tax burden on the basis of each taxable propertys January 1st market value The appraisal district also determines eligibility for various types of property tax exemptions such as those for homeowners the elderly disabled veterans and charitable and religious organizations

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BCAD has eight school districts within the county boundaries Angleton ISD has approximately 10244 improved residential real property parcels 718 commercial parcels Pearland ISD has approximately 28699 improved residential real property parcels 1053 commercial parcels Alvin ISD has approximately 29517 improved residential real property parcels 1436 commercial parcels Brazosport ISD has approximately 19024 improved residential real property parcels 1513 commercial parcels other school districts include Danbury Damon Sweeny and Columbia Brazoria which have approximately 13560 improved residential real property parcels 801 commercial parcels BCAD appraises approximately 11776 lease and business personal property accounts BCAD also maintains approximately 3100 industrial accounts through contracted appraisal services An allocation of appraisal staff to parcel ratio is submitted annually to the chief appraiser for consideration

Cities are Alvin Angleton Brazoria Village of Brookside Clute Danbury Freeport Holiday Lakes Hillcrest Village Jones Creek Lake Jackson Liverpool Manvel Oyster Creek Pearland Quintana Iowa Colony Village of Baileys Prairie Richwood Village of Surfside Sweeny and West Columbia

The Office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations and the oversight of each departments functions The Appraisal Department is responsible for the valuation of all real and personal property accounts The appraisal divisions include commercial residential business personal and industrial The districts appraisers are subject to provisions of the Property Taxation Professional Certification Act and must be duly registered with The Texas Department of Licensing and Regulation

Brazoria County Appraisal District adheres to a state mandate requiring the application of the principles and practices set forth by Uniform Standards of Professional Appraisal Practice (USPAP) The purpose of USPAP is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers It is essential that appraisers develop and communicate their analyses opinions and conclusions to intended users of their services in a manner that is meaningful and not misleading

The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services The appraisers responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical

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obligations on those who serve in this capacity USPAP reflects the current standards of the appraisal profession

USPAP does not establish who or which assignments must comply Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make judge or enforce law Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation USPAP addresses the ethical and performance obligations of appraisers through Definitions Rules Standards Standard Rules and Statements

bull The DEFINITIONS establish the application of certain terminology in USPAP

bull The ETHICS RULE sets for the requirements for integrity impartiality objectivity independent judgment and ethical conduct

bull The COMPETENCY RULE presents pre-assignment and assignment conditions for knowledge and experience

bull The JURISDICTIONAL EXCEPTION RULE preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction

bull The SUPPLEMENTAL STANDARDS RULE provides the means for government agencies government sponsored enterprises and other entities that establish public policy to augment USPAP

bull The TEN STANDARDS establish requirements for appraisal appraisal review and appraisal consulting service and the manner in which each is communicated

bull STATEMENTS ON APPRASIAL STANDARDS clarify interpret explains or elaborates on a Rule or Standards

bull COMMENTS are an integral part of USPAP and have the same weight as the component they address These extensions of the DEFINITIONS RULES and STANDARDS RULES provide interpretation and establish the context and conditions for application

The appraisal ofproperty for property tax purposes is required by the Texas Constitution and statutory law (Article VIII Sec l(b) In addition Section 2602 of the Texas Property Tax Code states that all property shall be appraised at 100 of its market value Finally Section 403301 of the Government Code ensures equity among taxpayers in the burden of taxes and among school districts in the distribution offinancial aidfor public education This subchapter provides for uniformity in local property appraisal practices and procedures and in the

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determination of property values To effectively administer the code the comptroller conducts a bi-annual study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in the districts boundaries

THE BASICS

Property taxes are local taxes Local officials value your property set your tax rates and collect your taxes However Texas law governs how the process works

In Brazoria County property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property The valuation or appraisal process which is performed by the Brazoria County Appraisal District serves to allocate the tax burden among property owners The property tax provides more tax dollars for local government services in Texas than any other source Property taxes help pay for public schools city streets county roads police fire protection and many other services

CONSTITUTIONAL STANDARDS

The Texas State Constitution sets out five standards for the property tax

1 Taxation must be equal and uniform All property must be valued and taxed in an equal and uniform manner This provision which is an equity standard helps ensure that no single property or type of property pays more than its fair share of taxes

2 With some exceptions all tangible property must be taxed on its January 1 market value The exceptions include certain agricultural timber and recreational park and scenic land subject to special appraisal A propertys market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell

3 All property is taxable unless federal or state law provides an exemption for it An exemption excludes all or part of a propertys value from taxation

4 Property owners have a right to reasonable notice of increases in appraised property values

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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TABLE OF CONTENTS

PREAMBLE 4

THE BASICSCONSTITUTIONAL STANDARDS 7

HOW DOES THE SYSTEM WORK 8

EXECUTIVE SUMMARY 10

REQUIREMENTSASSUMPTIONSLIMITING CONDITIONS 10

OVERVIEW 12

TAX CODE REQUIREMENT 16

RATIO STUDIES GUIDELINES 20

USE OF FORECLOSURES 22

PTAD RATIO STUDY 22

PLANNED ACTIVITIES 23

ANALYSIS PLANNING AND ORGANIZATION 25

MASS APPRAISAL UPDATING SYSTEM 27

PLANNED REAPPRAISAL 29

REAL PROPERTY ESTIMATES 34

OTHER APPRAISAL TYPE OVERVIEW 34

EQUITABLE amp UNIFORM ANALYSIS 38

VALUE DEFENSE OVERVIEW 39

MASS APPRAISAL REPORT REFERENCE 40

LIMITING CONDITIONS 41

MASS APPRAISAL FLOW CHART 42

43BCAD 2016-2017 APPRAISAL CALENDAR

3

PREAMBLE

The Brazoria County Appraisal District (BCAD) is a political subdivision of the State of Texas created effective January 1 1980 The provisions of the Texas Property Tax Code govern the legal statutory and administrative requirements of the appraisal district A member board of directors appointed by the taxing units within the boundaries of Brazoria County constitutes the districts governing body The chief appraiser appointed by the board of directors is the chief administrator and chief executive officer of the appraisal district Currently the chief appraiser reports to the following board of directors

Title Member

Chairperson Glenn W Salyer Vice-Chairperson Gail Robinson Secretary Rubye Jo Knight Member Tommy King Member Susan Spoor Tax Assessorshy RoVin Garrett Collector

Appraisal districts are political subdivisions of the state and are responsible for appraising all property subject to taxation in Texas Unless otherwise provided by law appraised values are required to represent market value as of January 1st of each year In addition appraisal districts are required to reappraise all property at least once every three years but may have to reappraise more often to ensure that values represent market value as of January 1 each year It has been the practice of the Brazoria County Appraisal District to annually reappraise the market value of all properties in our district

The appraisal district is responsible for local property tax appraisal and exemption administration for 76 jurisdictions or taxing units in the county Each taxing unit such as the county a city school district municipal utility districts etc sets its own tax rate to generate revenue to pay for such things as police and fire protection public schools road and street maintenance courts water and sewer systems and other public services Appraisals established by the appraisal district allocate the years tax burden on the basis of each taxable propertys January 1st market value The appraisal district also determines eligibility for various types of property tax exemptions such as those for homeowners the elderly disabled veterans and charitable and religious organizations

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BCAD has eight school districts within the county boundaries Angleton ISD has approximately 10244 improved residential real property parcels 718 commercial parcels Pearland ISD has approximately 28699 improved residential real property parcels 1053 commercial parcels Alvin ISD has approximately 29517 improved residential real property parcels 1436 commercial parcels Brazosport ISD has approximately 19024 improved residential real property parcels 1513 commercial parcels other school districts include Danbury Damon Sweeny and Columbia Brazoria which have approximately 13560 improved residential real property parcels 801 commercial parcels BCAD appraises approximately 11776 lease and business personal property accounts BCAD also maintains approximately 3100 industrial accounts through contracted appraisal services An allocation of appraisal staff to parcel ratio is submitted annually to the chief appraiser for consideration

Cities are Alvin Angleton Brazoria Village of Brookside Clute Danbury Freeport Holiday Lakes Hillcrest Village Jones Creek Lake Jackson Liverpool Manvel Oyster Creek Pearland Quintana Iowa Colony Village of Baileys Prairie Richwood Village of Surfside Sweeny and West Columbia

The Office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations and the oversight of each departments functions The Appraisal Department is responsible for the valuation of all real and personal property accounts The appraisal divisions include commercial residential business personal and industrial The districts appraisers are subject to provisions of the Property Taxation Professional Certification Act and must be duly registered with The Texas Department of Licensing and Regulation

Brazoria County Appraisal District adheres to a state mandate requiring the application of the principles and practices set forth by Uniform Standards of Professional Appraisal Practice (USPAP) The purpose of USPAP is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers It is essential that appraisers develop and communicate their analyses opinions and conclusions to intended users of their services in a manner that is meaningful and not misleading

The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services The appraisers responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical

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obligations on those who serve in this capacity USPAP reflects the current standards of the appraisal profession

USPAP does not establish who or which assignments must comply Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make judge or enforce law Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation USPAP addresses the ethical and performance obligations of appraisers through Definitions Rules Standards Standard Rules and Statements

bull The DEFINITIONS establish the application of certain terminology in USPAP

bull The ETHICS RULE sets for the requirements for integrity impartiality objectivity independent judgment and ethical conduct

bull The COMPETENCY RULE presents pre-assignment and assignment conditions for knowledge and experience

bull The JURISDICTIONAL EXCEPTION RULE preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction

bull The SUPPLEMENTAL STANDARDS RULE provides the means for government agencies government sponsored enterprises and other entities that establish public policy to augment USPAP

bull The TEN STANDARDS establish requirements for appraisal appraisal review and appraisal consulting service and the manner in which each is communicated

bull STATEMENTS ON APPRASIAL STANDARDS clarify interpret explains or elaborates on a Rule or Standards

bull COMMENTS are an integral part of USPAP and have the same weight as the component they address These extensions of the DEFINITIONS RULES and STANDARDS RULES provide interpretation and establish the context and conditions for application

The appraisal ofproperty for property tax purposes is required by the Texas Constitution and statutory law (Article VIII Sec l(b) In addition Section 2602 of the Texas Property Tax Code states that all property shall be appraised at 100 of its market value Finally Section 403301 of the Government Code ensures equity among taxpayers in the burden of taxes and among school districts in the distribution offinancial aidfor public education This subchapter provides for uniformity in local property appraisal practices and procedures and in the

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determination of property values To effectively administer the code the comptroller conducts a bi-annual study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in the districts boundaries

THE BASICS

Property taxes are local taxes Local officials value your property set your tax rates and collect your taxes However Texas law governs how the process works

In Brazoria County property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property The valuation or appraisal process which is performed by the Brazoria County Appraisal District serves to allocate the tax burden among property owners The property tax provides more tax dollars for local government services in Texas than any other source Property taxes help pay for public schools city streets county roads police fire protection and many other services

CONSTITUTIONAL STANDARDS

The Texas State Constitution sets out five standards for the property tax

1 Taxation must be equal and uniform All property must be valued and taxed in an equal and uniform manner This provision which is an equity standard helps ensure that no single property or type of property pays more than its fair share of taxes

2 With some exceptions all tangible property must be taxed on its January 1 market value The exceptions include certain agricultural timber and recreational park and scenic land subject to special appraisal A propertys market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell

3 All property is taxable unless federal or state law provides an exemption for it An exemption excludes all or part of a propertys value from taxation

4 Property owners have a right to reasonable notice of increases in appraised property values

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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PREAMBLE

The Brazoria County Appraisal District (BCAD) is a political subdivision of the State of Texas created effective January 1 1980 The provisions of the Texas Property Tax Code govern the legal statutory and administrative requirements of the appraisal district A member board of directors appointed by the taxing units within the boundaries of Brazoria County constitutes the districts governing body The chief appraiser appointed by the board of directors is the chief administrator and chief executive officer of the appraisal district Currently the chief appraiser reports to the following board of directors

Title Member

Chairperson Glenn W Salyer Vice-Chairperson Gail Robinson Secretary Rubye Jo Knight Member Tommy King Member Susan Spoor Tax Assessorshy RoVin Garrett Collector

Appraisal districts are political subdivisions of the state and are responsible for appraising all property subject to taxation in Texas Unless otherwise provided by law appraised values are required to represent market value as of January 1st of each year In addition appraisal districts are required to reappraise all property at least once every three years but may have to reappraise more often to ensure that values represent market value as of January 1 each year It has been the practice of the Brazoria County Appraisal District to annually reappraise the market value of all properties in our district

The appraisal district is responsible for local property tax appraisal and exemption administration for 76 jurisdictions or taxing units in the county Each taxing unit such as the county a city school district municipal utility districts etc sets its own tax rate to generate revenue to pay for such things as police and fire protection public schools road and street maintenance courts water and sewer systems and other public services Appraisals established by the appraisal district allocate the years tax burden on the basis of each taxable propertys January 1st market value The appraisal district also determines eligibility for various types of property tax exemptions such as those for homeowners the elderly disabled veterans and charitable and religious organizations

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BCAD has eight school districts within the county boundaries Angleton ISD has approximately 10244 improved residential real property parcels 718 commercial parcels Pearland ISD has approximately 28699 improved residential real property parcels 1053 commercial parcels Alvin ISD has approximately 29517 improved residential real property parcels 1436 commercial parcels Brazosport ISD has approximately 19024 improved residential real property parcels 1513 commercial parcels other school districts include Danbury Damon Sweeny and Columbia Brazoria which have approximately 13560 improved residential real property parcels 801 commercial parcels BCAD appraises approximately 11776 lease and business personal property accounts BCAD also maintains approximately 3100 industrial accounts through contracted appraisal services An allocation of appraisal staff to parcel ratio is submitted annually to the chief appraiser for consideration

Cities are Alvin Angleton Brazoria Village of Brookside Clute Danbury Freeport Holiday Lakes Hillcrest Village Jones Creek Lake Jackson Liverpool Manvel Oyster Creek Pearland Quintana Iowa Colony Village of Baileys Prairie Richwood Village of Surfside Sweeny and West Columbia

The Office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations and the oversight of each departments functions The Appraisal Department is responsible for the valuation of all real and personal property accounts The appraisal divisions include commercial residential business personal and industrial The districts appraisers are subject to provisions of the Property Taxation Professional Certification Act and must be duly registered with The Texas Department of Licensing and Regulation

Brazoria County Appraisal District adheres to a state mandate requiring the application of the principles and practices set forth by Uniform Standards of Professional Appraisal Practice (USPAP) The purpose of USPAP is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers It is essential that appraisers develop and communicate their analyses opinions and conclusions to intended users of their services in a manner that is meaningful and not misleading

The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services The appraisers responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical

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obligations on those who serve in this capacity USPAP reflects the current standards of the appraisal profession

USPAP does not establish who or which assignments must comply Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make judge or enforce law Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation USPAP addresses the ethical and performance obligations of appraisers through Definitions Rules Standards Standard Rules and Statements

bull The DEFINITIONS establish the application of certain terminology in USPAP

bull The ETHICS RULE sets for the requirements for integrity impartiality objectivity independent judgment and ethical conduct

bull The COMPETENCY RULE presents pre-assignment and assignment conditions for knowledge and experience

bull The JURISDICTIONAL EXCEPTION RULE preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction

bull The SUPPLEMENTAL STANDARDS RULE provides the means for government agencies government sponsored enterprises and other entities that establish public policy to augment USPAP

bull The TEN STANDARDS establish requirements for appraisal appraisal review and appraisal consulting service and the manner in which each is communicated

bull STATEMENTS ON APPRASIAL STANDARDS clarify interpret explains or elaborates on a Rule or Standards

bull COMMENTS are an integral part of USPAP and have the same weight as the component they address These extensions of the DEFINITIONS RULES and STANDARDS RULES provide interpretation and establish the context and conditions for application

The appraisal ofproperty for property tax purposes is required by the Texas Constitution and statutory law (Article VIII Sec l(b) In addition Section 2602 of the Texas Property Tax Code states that all property shall be appraised at 100 of its market value Finally Section 403301 of the Government Code ensures equity among taxpayers in the burden of taxes and among school districts in the distribution offinancial aidfor public education This subchapter provides for uniformity in local property appraisal practices and procedures and in the

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determination of property values To effectively administer the code the comptroller conducts a bi-annual study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in the districts boundaries

THE BASICS

Property taxes are local taxes Local officials value your property set your tax rates and collect your taxes However Texas law governs how the process works

In Brazoria County property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property The valuation or appraisal process which is performed by the Brazoria County Appraisal District serves to allocate the tax burden among property owners The property tax provides more tax dollars for local government services in Texas than any other source Property taxes help pay for public schools city streets county roads police fire protection and many other services

CONSTITUTIONAL STANDARDS

The Texas State Constitution sets out five standards for the property tax

1 Taxation must be equal and uniform All property must be valued and taxed in an equal and uniform manner This provision which is an equity standard helps ensure that no single property or type of property pays more than its fair share of taxes

2 With some exceptions all tangible property must be taxed on its January 1 market value The exceptions include certain agricultural timber and recreational park and scenic land subject to special appraisal A propertys market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell

3 All property is taxable unless federal or state law provides an exemption for it An exemption excludes all or part of a propertys value from taxation

4 Property owners have a right to reasonable notice of increases in appraised property values

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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BCAD has eight school districts within the county boundaries Angleton ISD has approximately 10244 improved residential real property parcels 718 commercial parcels Pearland ISD has approximately 28699 improved residential real property parcels 1053 commercial parcels Alvin ISD has approximately 29517 improved residential real property parcels 1436 commercial parcels Brazosport ISD has approximately 19024 improved residential real property parcels 1513 commercial parcels other school districts include Danbury Damon Sweeny and Columbia Brazoria which have approximately 13560 improved residential real property parcels 801 commercial parcels BCAD appraises approximately 11776 lease and business personal property accounts BCAD also maintains approximately 3100 industrial accounts through contracted appraisal services An allocation of appraisal staff to parcel ratio is submitted annually to the chief appraiser for consideration

Cities are Alvin Angleton Brazoria Village of Brookside Clute Danbury Freeport Holiday Lakes Hillcrest Village Jones Creek Lake Jackson Liverpool Manvel Oyster Creek Pearland Quintana Iowa Colony Village of Baileys Prairie Richwood Village of Surfside Sweeny and West Columbia

The Office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations and the oversight of each departments functions The Appraisal Department is responsible for the valuation of all real and personal property accounts The appraisal divisions include commercial residential business personal and industrial The districts appraisers are subject to provisions of the Property Taxation Professional Certification Act and must be duly registered with The Texas Department of Licensing and Regulation

Brazoria County Appraisal District adheres to a state mandate requiring the application of the principles and practices set forth by Uniform Standards of Professional Appraisal Practice (USPAP) The purpose of USPAP is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers It is essential that appraisers develop and communicate their analyses opinions and conclusions to intended users of their services in a manner that is meaningful and not misleading

The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services The appraisers responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical

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obligations on those who serve in this capacity USPAP reflects the current standards of the appraisal profession

USPAP does not establish who or which assignments must comply Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make judge or enforce law Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation USPAP addresses the ethical and performance obligations of appraisers through Definitions Rules Standards Standard Rules and Statements

bull The DEFINITIONS establish the application of certain terminology in USPAP

bull The ETHICS RULE sets for the requirements for integrity impartiality objectivity independent judgment and ethical conduct

bull The COMPETENCY RULE presents pre-assignment and assignment conditions for knowledge and experience

bull The JURISDICTIONAL EXCEPTION RULE preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction

bull The SUPPLEMENTAL STANDARDS RULE provides the means for government agencies government sponsored enterprises and other entities that establish public policy to augment USPAP

bull The TEN STANDARDS establish requirements for appraisal appraisal review and appraisal consulting service and the manner in which each is communicated

bull STATEMENTS ON APPRASIAL STANDARDS clarify interpret explains or elaborates on a Rule or Standards

bull COMMENTS are an integral part of USPAP and have the same weight as the component they address These extensions of the DEFINITIONS RULES and STANDARDS RULES provide interpretation and establish the context and conditions for application

The appraisal ofproperty for property tax purposes is required by the Texas Constitution and statutory law (Article VIII Sec l(b) In addition Section 2602 of the Texas Property Tax Code states that all property shall be appraised at 100 of its market value Finally Section 403301 of the Government Code ensures equity among taxpayers in the burden of taxes and among school districts in the distribution offinancial aidfor public education This subchapter provides for uniformity in local property appraisal practices and procedures and in the

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determination of property values To effectively administer the code the comptroller conducts a bi-annual study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in the districts boundaries

THE BASICS

Property taxes are local taxes Local officials value your property set your tax rates and collect your taxes However Texas law governs how the process works

In Brazoria County property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property The valuation or appraisal process which is performed by the Brazoria County Appraisal District serves to allocate the tax burden among property owners The property tax provides more tax dollars for local government services in Texas than any other source Property taxes help pay for public schools city streets county roads police fire protection and many other services

CONSTITUTIONAL STANDARDS

The Texas State Constitution sets out five standards for the property tax

1 Taxation must be equal and uniform All property must be valued and taxed in an equal and uniform manner This provision which is an equity standard helps ensure that no single property or type of property pays more than its fair share of taxes

2 With some exceptions all tangible property must be taxed on its January 1 market value The exceptions include certain agricultural timber and recreational park and scenic land subject to special appraisal A propertys market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell

3 All property is taxable unless federal or state law provides an exemption for it An exemption excludes all or part of a propertys value from taxation

4 Property owners have a right to reasonable notice of increases in appraised property values

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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obligations on those who serve in this capacity USPAP reflects the current standards of the appraisal profession

USPAP does not establish who or which assignments must comply Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make judge or enforce law Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation USPAP addresses the ethical and performance obligations of appraisers through Definitions Rules Standards Standard Rules and Statements

bull The DEFINITIONS establish the application of certain terminology in USPAP

bull The ETHICS RULE sets for the requirements for integrity impartiality objectivity independent judgment and ethical conduct

bull The COMPETENCY RULE presents pre-assignment and assignment conditions for knowledge and experience

bull The JURISDICTIONAL EXCEPTION RULE preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction

bull The SUPPLEMENTAL STANDARDS RULE provides the means for government agencies government sponsored enterprises and other entities that establish public policy to augment USPAP

bull The TEN STANDARDS establish requirements for appraisal appraisal review and appraisal consulting service and the manner in which each is communicated

bull STATEMENTS ON APPRASIAL STANDARDS clarify interpret explains or elaborates on a Rule or Standards

bull COMMENTS are an integral part of USPAP and have the same weight as the component they address These extensions of the DEFINITIONS RULES and STANDARDS RULES provide interpretation and establish the context and conditions for application

The appraisal ofproperty for property tax purposes is required by the Texas Constitution and statutory law (Article VIII Sec l(b) In addition Section 2602 of the Texas Property Tax Code states that all property shall be appraised at 100 of its market value Finally Section 403301 of the Government Code ensures equity among taxpayers in the burden of taxes and among school districts in the distribution offinancial aidfor public education This subchapter provides for uniformity in local property appraisal practices and procedures and in the

6

determination of property values To effectively administer the code the comptroller conducts a bi-annual study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in the districts boundaries

THE BASICS

Property taxes are local taxes Local officials value your property set your tax rates and collect your taxes However Texas law governs how the process works

In Brazoria County property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property The valuation or appraisal process which is performed by the Brazoria County Appraisal District serves to allocate the tax burden among property owners The property tax provides more tax dollars for local government services in Texas than any other source Property taxes help pay for public schools city streets county roads police fire protection and many other services

CONSTITUTIONAL STANDARDS

The Texas State Constitution sets out five standards for the property tax

1 Taxation must be equal and uniform All property must be valued and taxed in an equal and uniform manner This provision which is an equity standard helps ensure that no single property or type of property pays more than its fair share of taxes

2 With some exceptions all tangible property must be taxed on its January 1 market value The exceptions include certain agricultural timber and recreational park and scenic land subject to special appraisal A propertys market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell

3 All property is taxable unless federal or state law provides an exemption for it An exemption excludes all or part of a propertys value from taxation

4 Property owners have a right to reasonable notice of increases in appraised property values

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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determination of property values To effectively administer the code the comptroller conducts a bi-annual study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in the districts boundaries

THE BASICS

Property taxes are local taxes Local officials value your property set your tax rates and collect your taxes However Texas law governs how the process works

In Brazoria County property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property The valuation or appraisal process which is performed by the Brazoria County Appraisal District serves to allocate the tax burden among property owners The property tax provides more tax dollars for local government services in Texas than any other source Property taxes help pay for public schools city streets county roads police fire protection and many other services

CONSTITUTIONAL STANDARDS

The Texas State Constitution sets out five standards for the property tax

1 Taxation must be equal and uniform All property must be valued and taxed in an equal and uniform manner This provision which is an equity standard helps ensure that no single property or type of property pays more than its fair share of taxes

2 With some exceptions all tangible property must be taxed on its January 1 market value The exceptions include certain agricultural timber and recreational park and scenic land subject to special appraisal A propertys market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell

3 All property is taxable unless federal or state law provides an exemption for it An exemption excludes all or part of a propertys value from taxation

4 Property owners have a right to reasonable notice of increases in appraised property values

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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5 Each property in a given appraisal district must have one appraised value An appraisal districts boundaries generally follow the boundaries of the taxing units which are located in it

How does the system work

There are three main parts to the property tax system in Texas

An appraisal district in each county sets the value of taxable property each year The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation

An appraisal review board (ARB) settles any disagreements between you and the appraisal district about the value of your property

Local taxing units including the county cities school districts and special districts decide how much money they will spend each year This in turn determines the tax rates they need to set and the total amount of taxes that you and your neighbors will pay

The system has four stages valuing the taxable property protesting the values adopting the tax rates and collecting the taxes

January 1 marks the beginning of property appraisal What a property is used for on January 1 market conditions at that time and who owns the property on that date determine whether the property is taxed the value qualifications for exemptions and who is responsible for paying the tax

Between January 1 and April 3D the appraisal district processes applications for tax exemptions agricultural and timber appraisals and other tax relief By law beginning April 1 the appraisal review board begins hearing protests from property owners who believe their property values are incorrect or who feel they were improperly denied an exemption or agriculturaltimber appraisal The ARB is an independent panel of citizens responsible for handling protests about the appraisal districts work When the ARB finishes its work the chief appraiser gives each taxing unit a list of taxable property known as the appraisal roll

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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Usually in September or October the elected officials of each taxing unit adopt tax rates for their operations and debt payments Typically each property is taxed by several taxing units For example every property in Brazoria County is taxed by both the county and a school district Taxes may also be payable to a city or special district including such entities as municipal utility districts rural fire protection districts junior college districts and others

Tax collection starts in October and November as tax bills go out Taxpayers have until January 31 of the following year to pay their taxes On February 1 penalty and interest charges begin accumulating on most unpaid tax bills Taxing units may start legal action to collect unpaid property taxes once they become delinquent

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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Executive Summary

Brazoria County Appraisal District has prepared and published this reappraisal plan to comply with requirements of the Texas Property Tax Code Section 605(i) and 2518 Additionally this plan is intended to provide the citizens and taxing entities the appraisal district serves with a better understanding of the districts responsibilities and appraisal activities through the year

The tax code provides appraisal districts with a comprehensive set of instruction and requirements for the appraisal of real and personal property Chapter 23 Subchapter A covers irAppraisals Generally andfurther defines the scope of work required for appraisal districts Section 2301(b) mandates appraisal districts use generally accepted methods and techniques in their application

SB 1652 which requires the adoption of this plan uses reappraisal in a broad sense to mean the activities that the district undertakes every year - inspecting property updating models and appraising the property Under SB 1652 a property is reappraised when these activities are done even if its value does not change Accordingly this plan describes BCADs activities as annual reappraisal The board of directors believes this plan is appropriate and in the public interest because it will make property owners fully aware of how their propertys value was derived even if no change has occurred and no notice was generated It is important for the reader to understand that this plan uses the term reappraisal year in a different sense than has been the practice at the Brazoria County Appraisal District in prior years

REAPPRAISAL PLAN REQUIREMENTS ASSUMPTIONS AND LIMITING CONDITIONS

The reappraisal plan is adopted by the Brazoria County Appraisal District Board of Directors no later than September 15th of each year and reflects assessments with a January 1st effective date respectively The goal of the plan is to appraise all properties atfair market value the plan itself includes but is not exclusive to building permits and reappraisal of accounts based on historical data and best estimates as to what number of properties will be targetedfor reappraisal At the time of approvalfor the Reappraisal Plan a complete listing of the actual properties to be targeted for reappraisal cannot be specifically identified as BCAD does not undertake a geographical reappraisal effort BCAD undertakes an as

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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needed reappraisal approach as opposed to a geographical or boundary limited reappraisal approach in order to better achieve the goal of appraising all property at fair market value each year Therefore BCADs plan will always target the properties that meet the following criteria

1 Any account that has been flagged for re-inspection or partial complete status as ofJanuary 1 of the prior year

2 Any account that had a significant building permit issued from one of the cities in or by the county from January 1 to December 31 and construction began prior to January 1

3 Any account where data or inquiry has been provided to BCAD that indicates the property has had a conditional change that is not currently reflected on the record

4 Any account that falls within a delineated area targeted for reappraisalshytypically areas where overall sales ratio is less than 95 or is greater than 105 andor areas with a higher concentration protests from the prior year

5 Any mobile home park that has not been renderedor a park list not provided

6 Any areas of concentration of appeals sales andor last inspection dates earlier that 2012

7 Any account or area deemed to be in need of reappraisal by supervision 8 All business personal property accounts 9 Any accounts in accordance with contracted appraisal services for minerals

industrial etc 10 Any area with economic changes either positive or negative

NOTE - A special reappraisal will be conducted in areas impacted by the June 2016 flood which prompted Governor Gregg Abbott to declare Brazoria County a i

disaster area This reappraisal will include but not be limited to 1 mail out damage reports to property owners 2 physical inspections ofknown areas that were impacted 3 ratio studies limited to sales with closing dates after the event

In its early years BCADs practice was to review and appraise the bulk of its property in odd-numbered years By the early 1990s the explosive growth in the local economy made it impractical to continue biennial reappraisal and BCAD changed ta a practice of reviewing and appraising 01 taxable property accounts on on annual basis A praperty was considered ta be reappraised if its value changed irrespective af the year Only one distinction between a reappraisal year and a nan-reappraisal year has remained - the district has only sent appraisal notices to those whose property value changed

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

12

DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

13

however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

17

condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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REAPPRAISAL PLAN OVERVIEW

The 2016-2017 reappraisal plan consists of two primary functions - fixed tasks and variable tasks Fixed tasks are those required to be done on an annual basis and are associated with working building permits received on a monthly basis from the cities with in and including Brazoria County boundaries Variable tasks are those tasks associated with our annual reappraisal effort including but not limited to the reappraisal of certain categories of income producing properties foreclosure analysis and reappraisal of areas with higher concentrations of appeals for the previous year The following are considered fixed tasks conducted annually

PLANNING AND ORGANIZATlON

A calendar of key events with critical completion dates is preparedfor the district to identify the operational tasks required to facilitate the preparation of the appraisal roll Production standards for field and in house act ivies are incorporated in the process in order to comply with state mandates

ANALYSIS OF AVAILABLE RESOURCES

Staffing and budget requirements for appraisal year are considered in the annual budget process as adopted by the board of directors Existing appraisal practices which are continued from year to year are identified and methods utilized to keep these practices current are specified by district management in planning sessions that include but are not exclusive to information system support mapping GIS modeling and analysis

MASS APPRAISAL SYSTEM

Mass Appraisal System - Computer Assisted Mass Appraisal (CAMA) system revisions required will be specified and prioritized with Information Systems All computerforms and procedures will be reviewed and revised annually and updates will be facilitated according to state mandates

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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DATA COLLECTION

Field and office procedures will be reviewed and revised as required for data collection Activities scheduled for each year include new construction demolition remodeling re-inspection ofproblematic market areas re-inspection of the universe of properties on a three-year cycle andfield andor office verification of sales data and property characteristics Re-inspection of properties will be completed using physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

ANALYSIS Mass appraisal models schedules studies will be tested each year through ratio studies by market analysis and comparison with reliable sources Proposed values on each category will be tested for accuracy and reliability in randomly selected areas or criteria All studies will be conducted in accordance with International Association ofAssessing Officers (lAAO) standards and the Uniform Standards of Professional Appraisal Practices (USPAP)

The following are considered annual variable tasks

DELINIATED NEIGHBORHOODS

Based on ratio studies conducted neighborhoods are defined and reworked based on ratios less than 90 and greater than 105 assuming sufficient sales data is analyzed Delineation of a neighborhood for the purpose of market analysis includes consideration of geography property types and uses demographics and economics The properties within these market areas (neighborhoods) should be in direct competition and should share complementary land uses congruous grouping of inhabitants bUildings andor businesses A listing of neighborhoods to be reappraised is included in the Appendix

CLASSIFICATlONCODES

Changes in the reporting of Texas Property Tax Classifications were made by the comptroller in 2014 and became effective January 1 2015 these changes included but were not limited to the following 1) qualifying agriculture land remains 01

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however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

however the non-homesteaded improvements on the land are now D2 2) previously D2 was a land code for non-qualifying land - all D2 land codes are changed to E4 3) homesteaded improvements on qualifying AG land remain El as do homesteaded improvements on non-qualifying land 4) adjoining nonshyexempt lots are now coded Al if contiguous with a homesteaded lot

VALUA TlON ANALYSIS BY PROPERTY TYPE

Using market analysis of comparable sales locally tested cost data and income analysis when applicable valuation models will be specified and calibrated in compliance with supplemental standards from the IAAO and U5PAP The calculated values will be tested for accuracy and uniformity using ratio studies

PERFORMANCE ANALYSIS

Annually BCAD staff analyze the previous years equalized values that have been certified with ratio studies to determine appraisal accuracy and appraisal uniformity overall In its annual procedures the district tests values by market area within state property reporting categories Ratio studies are done in compliance with the current Standard on Ratio Studies from the International Association of Assessing Officers

TREA TMENT OF RESIDENCE HOMESTEADS

Beginning in 1998 the state of Texas implemented a constitutional classification scheme concerning the appraisal of residential property that receives a residence homestead exemption Under the law beginning in the second year a property receives a homestead exemption increases in the value of that property are capped N The value for tax purposes (appraised value) of a qualified residence homestead will be the LESSER of the market value or the preceding years appraised value + 10 + the value of any improvements added since the last reshyappraisal year Values of capped properties must be recomputed annually If a capped property sells the cap automatically expires as ofJanuary 1st of the following year

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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NEW LA WSRULES

New laws enacted by the Texas Legislature may change some of the appraisal methodologies used by BCAD when applicable new guidelines are formulated and can be found in the Brazoria County Appraiser~s Manual

IN-HOUSE REAPPRAISAL

In-House Reappraisals are based on those market areas and properties that have been targeted to be revalued including~ but not exclusive to concentrations of protests~ sales andor low ratios The reappraisal in these areas can be accomplished utilizing digital aerial photography~ street view photography and statistical data These are tools recognized and accepted by the International Association ofAssessing Officers

FORECLOSURE ANALYSIS

The district is responsible for researching sales and determining if the transaction is arm~s length prior to the inclusion in market analysis Sales must meet a set of criteria to be considered a market indicator Recent changes in law mandate that districts now include for consideration foreclosed properties Foreclosures are reviewed to determine the time on the market~ exposure to the market and any allowances made by the buyer andor seller The condition of the property is also estimated at the time of sale and as ofJanuary 1st

As with any market transaction outlier sales that could skew valid findings are suppressed from the analysis

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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REAPPRAISAL REQUIREMENTS

TAX CODE REQUIREMENT

S B 1652 enacted in 2005 by the Texas Legislature amended the Tax Code to require a written biennial reappraisal plan The following details the changes to the Tax Code

The Written Plan

Section 605 Tax Code is amended by adding Subsection (0 to read as follows

(i) To ensure adherence with generally accepted appraisal practices the board of directors of an appraisal district shall develop biennially a written plan for the periodic reappraisal of all property within the boundaries of the district according to the requirements of Section 2518 and shall hold a public hearing to consider the proposed plan Not later than the 10th day before the date of the hearing the secretary of the board shall deliver to the presiding officer of the governing body of each taxing unit participating in the district a written notice of the date time and place of the hearing Jot later than September 15 of each year the board shall complete its hearings make any amendments and by resolution finally approve the plan Copies of the approved plan shall be distributed to the presiding officer of the governing body of each taxing unit participating in the district and to the comptroller within 60 days of the approval date

Plan for Periodic Reappraisal

Subsections (a) and (b) Section 2518 Tax Code are amended to read as follows

(a) Each appraisal office shall implement the plan for periodic reappraisal of property approved by the board of directors under Section 605 (i)

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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(b) The plan shall provide for the following reappraisal activities for all real and personal property in the district

l Identifying properties to be appraised through physical inspection or by other reliable means of identification including deeds or other legal documentation aerial photographs land-based photographs surveys maps and property sketches

BCAD receives listings of all deeds filed with the Brazoria County Clerks office These deeds are read and abstracted by stoff and the information recorded in the computer assisted moss appraisal system (CAMA) including grantor grantee and dote of record volume and page Property identification numbers are assigned to each parcel

Business personal property is located by stoff through canvassing the county using data sources and processing state mandated renditions Lists ofcommercial vehicles are also purchased annually and tied to appropriate business accounts Renditions are reguired ofutilities railroads and pipelines

Oil and gas wells are discovered using Texas Railroad Commission records and production records are processed by a contracted appraisal firm Ownership is determined by division orders

BCAD utilizes both cadastral mops and geographic information systems (GIS) to determine ownership lines for all real estate Aerial photography is interfaced with the GIS for additional layers of information

2 Identifying and updating relevant characteristics of each property in the appraisal records

BCADs goal is to physically inspect all parcels once every three years according to state mandate However budget time and manpower limitations do not always allow for appraisers to walk trom property to property measuring structures and noting

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

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showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

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condition changes - instead the use ofaerial photography has been integrated into the reappraisal phase for existing improvements New construction is found through permits and by driving the county_ Appraisers note the date of their inspection make exterior sketches and notations ofattributes and components which allows for the calculation of value

Rural acreage is inspected to verify existing agricultural and wildlife management use Reapplications for productivity are reguired periodically and management profiles are reguired annually

Business personal property is physically inspected annually The guality and density of inventories are determined as ofJanuary 1st

and the age and conditions of furniture fixtures machinery etc is noted Any discrepancies between field inspection and the property owners rendition may require solicitation ofadditional information

BCAD contracts with an appraisal firm that specializes in the appraisal ofoil and gas properties utilities railroads and pipelines

(3) Defining market areas in the district

Annually properties are combined into delineated neighborhoods ll

or market areas typically have improvements ofsimilar construction and type Market sales are used to define market areas and improvement and land schedules are developed accordingly Commercial properties are categorized by subset codes and delineated by trade areas with similar rents quality and age All sales are analyzed quarterly to refine these market delineations Land categories are developed based on highest and best used andor value in use

(4) Identifying property characteristics that affect property value in each market area including

(A) The location and market area of the property

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(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

(B) Physical attributes of property such as size age and condition

(C) Legal and economic attributes and (D) Easements covenants leases reservations

contracts declaration special assessments ordinances or legal restrictions

Each parcel has information recorded in the CAMA system Land attributes consist of legal description dimensions zoning size utility access etc Legal characteristics are noted and used for developing schedules and defining market areas Each improvement record consists ofcurrent sketch with measurements photograph and individual characteristics including class construction guality year ofconstruction and specific attributes to the improvement

(5) Developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics

BCAD1s CAMA system utilizes an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics The model uses the cost approach to value to estimate the original cost ofeach building component Market sales are studies for improvement contribution in each market area and adjustments to cost schedules are applied to each improvement less depreciation - these are then tested against Marshal amp Swift Residential Cost Estimates annually Finally market adjustment factors are applied Income producing properties such and apartments hotels mini-warehouses are valued using the income approach to value however cost schedules and depreciation tables are maintained using Marshall amp Swift Commercial Cost Estimates

(6) Applying the conclusions reflected in the model to the characteristics of the properties being appraised and

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BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

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analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

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2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

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within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

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PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

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23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

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IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

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MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

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PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

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to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

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If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

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Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

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included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

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REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

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The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

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AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

BCAD uses conclusions reflected in appraisal model results to construct and maintain property classification guides identifying minimum property characteristics typical for each property class By utilizing sales data for each neighborhood and market area conclusions concerning age qualitb condition construction components and depreciation are tested against Marshall ampSwift Cost Estimates

(7) Reviewing the appraisal results to determine value

BCAD tests the results of its appraisal model values (appraisals) against market data (sales) to determine the accuracy and level of appraisal as well as to monitor the integrity of the appraisal model (CAMA) Ratio studies are performed quarterly and studies to maintain and update appraisal schedules to achieve market value appraisals Sales ratios are performed for each neighborhood and market area to determine if values assigned by the model fall within a 95-105 confidence interval level

REVALUATION POLICY (REAPPRAISAL CYCLE)

It is the practice of the Brazoria County Appraisal District to annually re-appraise the market value of all properties in the district boundaries In each year BCAD will conduct a complete appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code Market areas that have existing values consistent with the market and demonstrate uniformity will not be noticed (if) at current year value levels The activities involved in the appraisal analysis are described below

STEPS IN RATIO STUDIES

Steps utilized by staff are in accordance with Standard on Ratios Studies of the International Association of Assessing Officers (lAAO) and include but are not limited to 1) definition of purpose - BCAD will perform ratio studies on a periodic basis to evaluate overall levels of appraisal These studies will be used as performance

20

analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

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USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

22

2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

23

within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

24

PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

25

23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

26

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

analysis to determine whether value estimates are equitable and consistent with the local market place 2) collectionpreparation of market data - the BCAD appraisal department will collect data from a variety of sources including but not exclusive to real estate sources questionnaires grantors grantees personal contact field review closing statements and vendors 3) coordinating BCAD appraisals with market data - BCAD staff will compare appraised values with sales prices on properties Special care is taken to identify non-arms length transactions outliers etc 4) stratification - BCAD staff performs stratification by school district andor delineated neighborhoods 5) statistical analysis - district staff performs ratio studies and statistical analysis after appraisal schedule modifications are made to evaluate performance The median weighted mean coefficient of dispersion price related differential standard deviation and range will be calculated on each applicable class category and delineated area of properties and 6) evaluation of results - BCAD staff will use the measures of central tendency and the relative measures of dispersion and all indication of variance to evaluate the districts overall level of appraisal Sales ratio analysis may indicate areas where appraisers need additional training to improve performance and to eliminate bias in the appraisal process Real property appraisal plans are adjusted according to ratio study indications

1 Median is the middle ratio when the ratio is arrayed in order of magnitude If there are two middle numbers the median will be the average of those two

2 Mean is the average of the ratios 3 Weighted Mean is the average also however it is considered when

ratios exist with high sales prices to eliminate outliers from skewing the results

4 Coefficient of Dispersion measures the average percent deviation of the ratios from the median

5 Price Related Differential is the mean divided by the weighted mean This statistic when higher than 103 indicates a regressive market A PRD below 98 indicates progressivity

21

USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

22

2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

23

within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

24

PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

25

23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

26

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

USE OF FORECLOSURES IN VALUATION PROCESS

Although foreclosures do not meet the definition of a fair market value transaction they are indicators of a down market due to effects of the economy Factors weighed when using foreclosures include but are not limited to 1) the size of the sample versus the size of the delineated parcel 2) the market trends of a delineated neighborhood prior to the addition of foreclosures and 3) the physical condition of the foreclosure sales After weighing these factors analysis is done to determine the reliability of the foreclosures as indicators of market value for a delineated neighborhood Not all foreclosures are accepted as indicators but are treated as outliers instead It is not expected that district staff will be able to verify the condition of every foreclosure sale however reasonable efforts are made

TYPICAL ADJUSTMENTS

BCAD will consider adjustments to confirmed sales prices for the effects of time financing andor special seller concessions These adjustments and the methodology used are outlined in the BCAD Appraisal Manual

PROPERTY TAX ASSISTANCE DIVISION BI-ANNUAL RA TlO STUDY The Property Tax Assistance Division of the Texas Comptrollers Office performs bishyannual ratio studies on all Texas school districts and appraisal districts State law requires that BCAD appraise all taxable property at 100 ofmarket value Failure to appraise property within a confidence interval of95 to 105 may result in diminishedfunding from the state to local school districts In addition failure by the CAD to appraise properties within the PTDs intervals could result in penalties andor reorganization through an oversight committee The CAD is also subject of a bi-annual Methods and Assistance Program audit by the comptrollers office to insure uniformity of methodology and administrative practices under IAAO standards

22

2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

23

within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

24

PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

25

23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

26

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

2016-2017 PLANNED ACnVrnES

The Brazoria County Appraisal District by policy adopted by the board of directors conducts a complete reappraisal of all properties in school districts within the boundaries of Brazoria County on a three year cycle in compliance with the Texas Property Tax Code In each year BCAD will conduct an appraisal analysis of all properties in the district and will update property values as necessary The chief appraiser will provide a notice of appraisal for each property in compliance with section 2519 of the Tax Code

RESOURCES

The office of the Chief Appraiser is primarily responsible for overall planning organizing staffing coordinating and controlling of district operations The administration departments function is to plan organize direct and control the business support functions related to human resources budget finance records management purchasing fixed assets facilities and postal services The appraisal department is responsible for the valuation of all real and personal property accounts The property types appraised include commercial residential business personal mineral utilities and industrial The districts appraisers are subject to the provisions of the Property Taxation Professional Certification Act and must be duly registered with the Texas Department of Licensing and Regulation Staff works under the guidelines of the Property Tax Assistance Division of the state comptrollers office and strictly adheres to standards set forth by the International Association of Assessing Officers (IAAO) and Uniform Standards Practices and Principles (USPAP) Support functions including records maintenance information and assistance to property owners as well as property tax appraisal hearings coordinated by personnel in support services

Appraisers are trained in accordance with Title 16 Chapter 94 of the Texas Administrative Code promulgated under the authority of the Texas Occupations Code Chapters 51 and 1151 Education requirements include but are not limited to the following 32 hours of basic training in the Texas Property Tax system no less than eight hours of ethics 18 hours of income business personal property and real property analysis 15 hours of USPAP 24 hours of theory and practice of appraisal 18 hours in mass appraisal and 16 hours of Texas Property Tax Law

23

within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

24

PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

25

23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

26

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

within a five year period to be accredited as a Registered Professional Appraiser (RPA) Additionally all appraisal personnel receive extensive training in the data gathering and valuation processes Standardized manuals are provided to ensure uniform and accurate data collection and analysis

As of 2016 the appraisal district staff consists of 57 full time employees with the followi ng classifications

bull 5 - OfficialAdministrator (executive level administration) - Chief Appraiser Deputy Chiefs of Administration and Appraisal and Directors of Appraisal Operations and Finance

bull 10 - Professional (supervisory andor senior staff) - Supervisors of Customer Service GIS MappingAbstracting and Business Personal Property Appraisal Managers for land residential and commercial departments Information System Coordinator Special Projects Manager and an Appraisal Analyst (for 2016-2017 Analyst is being trained)

bull 8 - Registered Appraisers excluding executive andor professional level administratorsstaff

bull 9 - Technical Support Staff (including GIS tech Appraisal techs and administrative assistant)

bull 14 - Non-Technical Support (customer service abstracting clerical and other)

bull Additional appraisal support for industrial utility and mineral accounts is provided on a contractual basis

Re-inspection of properties will be completed in compliance with The Texas Property Tax Code Section 2518(b) using a combination of field inspections and office review The approximate allocations are 4700 parcels per residentialland appraiser 800 parcels per commercial appraiser 1900 parcels per AG appraiser and 2200 business personal property accounts per appraiser Additional allowances may be added in 2017 in accordance with the 2017 adopted budget

24

PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

25

23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

26

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

PERFORMANCE ANALYSIS

For each Tax Year the previous years equalized values will be analyzed with ratio studies to determine appraisal accuracy and appraisal uniformity overall and by market area within state property reporting categories Ratio studies will be conducted in compliance with the IAAO Standard of Ratio Studies Descriptive statistics such as mean median and weighted mean ratios will be calculated for

properties in each reporting category to measure the level of appraisal accuracy and the coefficient of dispersion (COD) will be calculated to measure appraisal uniformity by property reporting category This analysis will be used to develop the starting point for establishing the accuracy and uniformity of appraisal performance

PLANNING AND ORGANIZATION

For each year a calendar of key events with critical completion dates will be prepared for each major work area Production standards for field and office activities will be established and incorporated in the planning and scheduling process The scope of work available time frame staffing resources and any

budgetary constraints have been considered in the development of this reappraisal plan To the extent that circumstances require revision to this plan

amendments to the plan will be submitted to the board of directors for approval

MASS APPRAISAL SYSTEM

Computer Assisted Mass Appraisal (CAMA) system revisions and enhancements will be specified and prioritized with Information Systems Legislative mandates will be addressed and implemented into the necessary system applications All

computer generated forms letters notices and orders will be reviewed annually and revised as required The following details the procedures as they relate to the 2016 and 2017 Tax Years (SEE FLOW CHART PG 54)

REAL PROPERTY VALUATION

Revisions to cost models income analysis and market studies will be specified updated and tested each Tax Year In each year cost schedules will be tested with market data to insure that the appraisal district is in compliance with Section

25

23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

26

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

23011 of the Tax Code Replacement cost new tables as well as depreciation tables will be tested for accuracy and uniformity through ratio studies

Income expense and occupancy data will be updated in the income analysis for each market area and cap rate studies will be completed using current sales data When available models will be tested with market data

Land tables will be updated using current market data and then tested with ratio studies Restriction covenants and other factors influencing value will be identified and analyzed Value modifiers will be developed for property categories by market area as required and tested with ratio studies

PERSONAL PROPERTY VALUATION

Personal property staff will analyze rendition and prior year hearing documentation Models will be refined according to actual original cost data and valuation procedures will be reviewed modified as needed and tested

APPRAISAL NOTICES

Appraisal notices will be reviewed for legal sufficiency and correctness Enclosures will be updated including the latest version of any comptrollers taxpayer publication Real property notices will generally be mailed in April Personal property notices will be mailed in Mayor as soon as is practical

HEARING PROCESS

Appraisal supervisors will conduct training of staff in March of each year to ensure preparedness for informal meetings and formal hearings which begin in April of each Tax Vear Revisions and enhancements to existing hearing scheduling procedures for informal and formal appraisal review board hearings will be reviewed and updated to ensure efficiency and timely certification of the appraisal roll Standards of documentation and the appraisal district hearing evidence will be reviewed and updated to reflect the current valuation methods and practices Production of documentation will be tested and compliance with Tax Code requirements will be ensured

26

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

IDENTIFYING ampUPDATING REAL PROPERTY CHARACTERISTICS

Field and office procedures will be reviewed and revised as required for data collection and verification of value-related and descriptive property characteristics for each property Activities scheduled for each Tax Year include physical and in-house aerial inspection of new construction demolition and remodeling re-inspection of problematic market areas and re-inspection of the universe of properties on a three year cycle as well as verification of sales information

NEW CONSTRUCTIONDEMOLITION

Field and office review procedures for inspection of new construction will be reviewed and revised as required Field production standards will be established and quality review will be conducted to verify accuracy of data Building permits will be received from the cities and county in paper form CAMA system uploads and data entry will both be used to input the data into the permits database

REMODELING

Market areas with extensive improvement remodeling will be identified and onshysite inspections will be scheduled to verify property characteristic data Updates to valuation procedures will be tested with ratio studies before they are finalized in valuation modeling

RE-INSPECTION OF PROBLEMATIC MARKET AREAS

Real property market areas stratified by property classification will be tested for low or high protest volumes low or high sales ratios and high coefficient of dispersion Market areas that fail any or all of these tests will be determined to be problematic Field reviews will be scheduled to verify and correct property characteristics data Additional sales data will be researched and verified in order to assess whether the market area is correctly stratified In the absence of adequate market data neighborhood boundary lines may need to be redrawn

27

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

MARKET AREA DELINEATION

Market areas are defined by physical economic governmental and social forces that influence property values The effects of these forces were used to identify classify and stratify or delineate similarly situated properties into smaller more comparable and manageable subsets for valuation purposes Delineation can involve the physical drawing of neighborhood boundary lines on a map or it can also involve statistical separation of stratification based on attribute analysis These homogeneous properties have been delineated into valuation neighborhoods for residential property or economic class for commercial property but because there are discernible patterns of growth that characterize a neighborhood or market segment analyst staff will annually evaluate the neighborhood boundaries or market segments to ensure homogeneity of property characteristics

RE-INSPECTION OF THE UNIVERSE OF PROPERTIES

FIELD OR OFFICE VERIFICATION OF SALES DATA AND PROPERTY CHARACTERISTICS

Sales information will be verified and property characteristics data with the date of sale will be captured Since Texas does not require full disclosure of sale price the district will obtain sales prices through deeds voluntarily disclosed closing statements or fee appraisals usually submitted as evidence in a protest hearing buyer and seller mail questionnaires or third party sources such as real estate agents and various market data vendors

28

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

PLANNED REAPPRAISALS

For each Tax Year valuation models will be specified and calibrated in compliance with the supplemental standards from IAAO and USPAP The calculated values will be tested for accuracy and uniformity using ratio studies Performance standards will be in compliance with the guidelines set forth in the IAAO Standard on Ratio Studies Property values in all market areas will be analyzed and updated each reappraisal year as required for level and uniformity of value

REAL PROPERTY

Ratio studies will be conducted on each residential valuation neighborhood in the district to judge the two primary aspects of mass appraisal accuracy --level and uniformity of value These studies begin for the last quarter of 2016 through the first quarter of 2017

The physical valuation process for real property historically begins by mid-August - however due to a substantially higher volume of protests for the 2016 equalization phase the valuation process has been delayed until September with the exception of residential new construction

Real property appraisal teams will begin by completing the reappraisal no later than mid-March

Sale analysis sales outlier review neighborhood analysis and finalization of proposed estimates of value will likely occur in April

All town sites in accordance with the 2015-2016 adopted plan such as City of Freeport Pearland and Alvin town sites etc were successfully completed during the fall 2016 A reappraisal of the Sweeny ISD was also concluded

The valuation period will begin in August 2016 and last until mid-March 2017 Once the proposed values are finalized an equity study will be performed to test the level and uniformity of appraisal within property use and among various classes Whereas most real property is appraised using the Cost andor Market approaches apartments RV parks and mini-warehouses will be valued using the income approach Hotels and motels will be appraised based on income reported

29

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

to the Texas Comptrollers office All properties are appraised using the method deemed most appropriate pursuant to Section 230101 Valuation Method Used

Cost Approach

The district will use a cost-market approach when valuing single-family and multishyfamily residential properties The comparative unit method will be used to develop the (base cost of a structure Adjustments will then be made for differences from base specifications using the unit-in-place method Neighborhood or location adjustment factors will be developed from appraisal statistics provided by ratio studies to ensure that estimated values reflect both the supply and demand side of the market The following equation denotes the hybrid model used

MV MA [RCN - D] + LV

The market value (MV) equals the market adjustment factor (MA) applied to the replacement cost new less depreciation (RCNLD) plus the land value (LV) Market adjustments will be applied uniformly within neighborhoods to account for location variances between market areas or across a jurisdiction

Residential land values will be estimated using the base lot method which establishes the value of the standard or (base parcel within each stratum or delineated neighborhood through sales comparison analysis The analysis assumes that the major factors causing variations among land values within a neighborhood are view traffic and size In areas where insufficient vacant land sales exist the abstraction method also known as the land residual method and the allocation method known as the land ratio method will be used to establish base lot values within a neighborhood The analyst will develop a base lot and primary rate and assign each to a unique land table The square foot land table is designed to systematically value the primary and residual land based on a specified percentage of the primary rate A computerized land table stores the land information required to consistently value individual parcels within neighborhoods Land adjustments will be applied on individual properties where necessary to adjust for such influences as view shape size and topography among others

30

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

If a neighborhood is to be updated the analyst will run a cost ratio study that compares recent sales prices of properties appropriately adjusted for the effects of time and stratified geographically by neighborhood with the propertys cost value The calculated ratio derived from the sum of the sold properties cost value divided by the sum of the sales prices indicates the neighborhood level of value based on the unadjusted cost value for the sold properties This cost-to-sale ratio will be compared to the appraisal-to-sale ratio to determine the market adjustment factor for each neighborhood This market adjustment factor is needed to trend the values obtained through the cost approach closer to the actual market evidenced by recent sales prices within a given neighborhood The sales used to determine the market adjustment factor will reflect the market influences and conditions only for the specified neighborhood thus producing more representative and supportable values The market adjustment factor calculated for each update neighborhood will be applied uniformly to all properties within a neighborhood and a second set of ratio studies will be generated that compares recent sale prices with the proposed market values for these sold properties From this set of ratio studies the analyst will judge the appraisal level and uniformity in both updated and non-updated neighborhoods and finally for the school district as a whole

An extensive review and revision of the residential cost schedules will be performed biannually and tested against the Residential Marshall amp Swift Cost Estimators Commercial schedules are updated annually through an integrated format of Marshall amp Swift Cost Estimators

Sales Comparison Approach

As indicated in Property Appraisal and Assessment Administration (lAAO 1990) in the absence of a sale of the subject sales prices of comparable properties are usually considered the best evidence of market value The sales comparison approach models the behavior of the market by comparing the properties being appraised with comparable properties that have recently sold or for which offers to purchase have been made Their sales prices will then be adjusted for differences from the subject and a market value for the subject is estimated from the adjusted sales prices of comparable properties

31

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

Depreciation

Depreciation tables are based on an extended life theory which encompasses a remaining life and effective age approach The depreciation system also incorporates a CDU (condition desirability utility) rating system to provide a logical reasoning process by means of which normal age depreciation may be modified according to the appraisers best determination of the relative loss of value in a structure as compared with the average loss that might be expected

Income Approach

The income approach to value will be applied to those real properties that are typically viewed by market participants as income producing which are bought and sold based on the propertys ability to produce income and for which the income methodology is considered a leading value indicator The first step in the income approach pertains to the estimation of market rent This is derived primarily from actual rent data furnished by property owners and from local market study publications This per unit rental rate multiplied by the number of units results in the estimate of potential gross rent

A vacancy and collection loss allowance is the next item to consider in the income approach The projected vacancy and collection loss allowance is established from actual data furnished by property owners and on local market publications This allowance accounts for periodic fluctuations in occupancy both above and below an estimated stabilized level The market derived stabilized vacancy and collection loss allowance is subtracted from the potential gross rent estimate to yield an effective gross rent A secondary income or service income is calculated as a percentage of stabilized effective gross rent Secondary income represents parking income escalations reimbursements and other miscellaneous income generated by the operations of real property The secondary income estimate is derived from actual data collected and available market information The secondary income estimate is then added to effective gross rent to arrive at an effective gross income or EGI

Allowable expenses and expense ratio estimated will be based on a study of the local market with the assumption of prudent management An allowance for non-recoverable expenses such as leasing costs and tenant improvements will be

32

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

included in the expenses A non-recoverable expense represents costs that the owner pays to lease rental space Different expense ratios will be developed for different types of commercial property based on use For instance retail properties are most frequently leased on a triple-net basis whereby the tenant is responsible for his pro-rata share of taxes insurance and common area maintenance In comparison a general office building is most often leased on a base year expense stop This lease type stipulates that the owner is responsible for all expenses incurred during the first year of the lease However any amount in excess of the total per unit expenditure in the first year is the responsibility of the tenant Under this scenario the total operation expense in year one establishes the base rate Any increase in expense over the base rate throughout the remainder of the lease term would be the responsibility of the tenant As a result expense ratios will be implemented based on the type of commercial property

Another form of allowable expense is the replacement of short-lived items such as roof or floor coverings air conditioning or major mechanical equipment or appliances requiring expenditures of large lump sums When these capital expenditures are analyzed for consistency and adjusted they may be applied on an annualized basis as stabilized expenses When performed according to local market practices by commercial property type these expenses when annualized are known as replacement reserves Subtracting the allowable expenses (inclusive of the non-recoverable expenses and replacement reserves) from the effective gross income yields an estimate of net operating income

Rates and multipliers will be used to convert income into an estimate of market value These include income multipliers overall capitalization rates and discount rates Each of these is used in specific applications Rates and multipliers also vary between property types as well as by location quality condition design age and other factors Therefore application of the various rates and multipliers must be based on a thorough analysis of the market

33

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

REAL PROPERTY REAPPRAISAL AREAS

For the 2016-2017 reappraisal phase the following areas will be flagged for inspection Commercial reappraisals will be conducted in the Alvin and Brazosport ISDs (approximately 3000 parcels) in addition as of the last quarter of 2016 there are approximately 160 active building permits and 300 next inspections Residential re-inspections will begin in Alvin ISD and portions of the Brazosport and Angleton ISDs that had high concentrations of sales andor protests Portions of the Brazosport and Angleton ISDs will be completed in accordance with the 2014-2015 adopted plan In addition as of the last quarter of 2016 there are approximately 2100 active building permits and 2400 next inspections Agricultural inspections will be conducted in Alvin and Pearland ISDs (approximately 2500 parcels)

Areas of Angleton and Columbia Brazoria ISDs that were impacted by the June 2016 flood will be reappraised beginning in September 2016 for the 2017 appraisal year These areas include but are not inclusive to

Holiday Lakes (approximately 600 parcels) Bar-X Subdivision (approximately 2900 parcels) areas around County Roads 36 and 288 in Angleton (approximately 800 parcels) Longhorn Subdivision and surrounding County Road 28 (approximately 200 parcels) County Road 25 (approximately 250 parcels)

Disaster Surveys will be available on the BCAD website for property owners to render damages from the flood These surveys may also initiate field review in additional areas Note Some properties in rural areas may have limited access therefore aerial inspection andor verifications are made

MOBILE HOMES

Real and personal property mobile homes will be valued using the cost approach BCAD cost and depreciation schedules will be compared against NADA Guides a nationally recognized pricing service NADA Guides will be used primarily to update cost schedules for mobile homes listed as personal property Biannually updated cost schedules will be used for real property mobile homes and for new mobile homes

34

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

The district will download from the Texas Department of Housing and Community Affairs website a list of transferred mobile homes to input into our database Clerical staff will then generate questionnaires seeking information on sales price serial and HUD numbers make and model and ownership Master lists identifying mobile home parks will be generated annually and used by appraisal staff to verify situs

According to Section 2S08(e) Tax Code a manufactured home placed on land owned by the same person will not be considered as real property unless the owner has filed a Statement of Ownership and Location with the county clerk or County tax assessor Unless this statement is filed the manufactured home will be carried in our records as personal property

SPECIAL USE PROPERTY VALUATION-AGRICULTURALTIMBERWILDLIFE PROPERTY

The appraisal district values agricultural and timber land in compliance with the Property Tax Codes Manual for the Appraisal ofAgricultural Land and Manual for the Appraisal of Timber Land which states that the cash lease method and the share lease method of appraisal are appropriate

Since most properties are leased by the owners to tenant farmers BCAD will use the cash lease method of appraisal The cash lease method is a modified income approach using the lease amount (income per acre) minus expenses (landowner) to give us the net-to-Iand value per acre Net-to-Iand values will be averaged for a five-year period to give an average net-to-Iand factor that will be divided by the capitalization rate for the year to give a value per class of agricultural production The agriculture appraisal staff will collect lease data from the lessee on a yearly basis

Timberland will be appraised in a similar method using data furnished by state agencies Wildlife appraisal is revenue neutral so whatever the previous agriculture use was prior to converting to wildlife management will be the value used

35

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

AGRICULTURE APPRAISAL

The Texas Constitution Article 8 Sec l-d-l provides for open space land devoted to farm ranch timber or wildlife management to be taxed based on its productive capacity rather than the current market value This special appraisal value is not an exemption and is based solely on the lands capacity to produce crops or livestock instead of its value on the real estate market Property that qualifies for this agricultural special appraisal value has a substantial reduction in taxes based on the type of agriculture that the open space land is currently devoted to Even though this lower value reduces the taxes on the property for the current tax year an additional tax called a rollback of these taxes will take place when the land stops being used for an agriculture purpose The tax code section 2355 provides for how to handle the change of use when the open space land stops being used for an agriculture purpose The rollback recaptures with interest the taxes saved for (5) years preceding the change in use A tax lien also attaches to the property on the date of the change of use Procedures for implementing this agricultural special appraisal value for the current tax year are based on the guidelines published in the Texas Constitution Tax Code and Manuals published by the Texas Comptroller

Brazoria County Appraisal District per the state manual for the Appraisal of Agricultural Land uses the standard cash lease method to determine the net to land estimates for the current agricultural special appraisal value per land class Typical cash leases and agriculture surveys sent out each year are used to determine these estimates

Wildlife Management

In order for a property to qualify for the wildlife management special appraisal value the land must already have an agricultural exemption The land must also be used to propagate a sustaining breeding migrating or wintering population of indigenous wild animals This includes the selection of at least one target species A wildlife management plan must be filed with the district to initially obtain a wildlife management special appraisal valuation Every year after the initial approval an updated annual wildlife management plan must be submitted in order to keep the wildlife management special appraisal valuation on the property Along with the management plans it is required that an updated map

36

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

showing the three selected management activities for the previous tax year to be submitted with the management plan Evidence like pictures receipts etc to show that the three selected management activities were at least attempted is also required The wildlife management forms are available at the districts office or online at the Texas Parks and Wildlife Office web site wwwtpwdstatetxus

INDUSTRIAL REAL PROPERTY

This property type will be valued each Tax Year by an outside contract appraisal firm The contracts for assistance in valuing major industrial complexes and general industrial property will be negotiated each year The board of directors will approve appraisal firm contracts each year Generally estimates of value developed by the appraisal firms will be provided to BeAD by April 1st or as soon as is practical

BUSINESS AND INDUSTRIAL TANGIBLE PERSONAL PROPERTY

These property types will be valued each Tax Year by district appraisal staff and contract appraisal firms Generally estimates of value developed by the appraisal firms will be provided to BeAD in May of each Tax Year The notices of appraised value for business and industrial personal property are generally mailed in early to mid May Situs checks are conducted on all accounts that failed to render a current value for 2015 any with returned mail and those accounts on a periodic list

UTILITY AND MINERAL PROPERTY

BeAD contracts with an engineering appraisal firm to provide estimates of value for real and personal property utilities Generally these values will be provided to BeAD by April 1st or as soon as is practical

INVENTORY PROPERTY

Improved and vacant property is appraised in compliance with the Texas Property Tax code Section 2312 (a) In general the district uses its own land value estimates and the actual itemized construction labor and material costs plus other soft or indirect costs to

37

estimate market value as of the assessment date The market values of improved inventory will be reviewed annually and inventory consideration will be eliminated when ownership transfers to the property owner

The tax code allows a wholesale valuation of real property inventory if it is 1) held for sale in the normal course of business for the owner 2) has never been occupied as a residence and 3) it has never been rented and produces no income

Vacant real inventory land will be valued using a discounted cash flow formula that considers value relative to the income or cash flow the interest or discount rate and the number of years the property is likely to be held As with improved inventory full market value will be applied once the vacant land is absorbed and ownership transfers for the purpose of residential construction

Equitable amp Uniform Market Analysis

Appraisal Equal and Uniform

The Texas Constitution gives taxpayers a number of rights (and responsibilities) concerning their property tax appraisals First the constitution makes all property in the state taxable unless exempt by law Second the constitution requires the appraisal districts to appraise all property at 100 of the value required by law Third and perhaps most important the constitution provides that taxation must be (equal and uniform More than 120 years ago the Texas Supreme Court described the equal and uniform requirement as follows

Taxation is equal and uniform N when no person or class of persons in the Territory taxed is taxed at a higher rate than are other persons in the same district upon the same value or thingJ and when the objects of taxation are the same by whomsoever owned or whatever they be Norris v City of Waco (1882) 57 Tex 635

Modern appraisal practices in the appraisal districts eliminate gross disparities that existed under the pre-appraisal district system One of the reasons that appraisal districts have been so effective in eliminating inequities is the use of computerized mass appraisal systems Appraisers are trained to collect property data in a uniform manner that does not vary from

38

property to property Computerized valuation programs apply this data to determine the value of each property uniformly and without exception A modern computerized mass appraisal system contains many checks and balances to catch inequality before it ever becomes a problem

Nevertheless while the kind of inequality the drafters of the tax code were thinking about simply doesnt exist any more there are occasional instances where minor inequality may appear to exist

Steps to insure equity of appraisals based on an equity protest include 1) determining the market value of a subject property based on sales in a delineated neighborhood 2) calculating the property appraisal ratio to determine the median appraisal ratio and 3) making a final determination for the subject property by applying that median percentage to the overall market value

VALUE DEFENSE OVERVIEW

Sect 4143 of the Texas Property Tax Code places the burden of proof on the appraisal district in protests regarding over-appraisal and unequal appraisal Evidence to be used by the district to meet this burden of proof for market value and equity in formal appraisal review board hearings is specified and tested A number of value defense issues apply to all property types Regardless of the nature of the protests or the type of property the district attempts to informally resolve all protests before they are scheduled for an appraisal review board hearing

The informal meeting process is seen as an opportunity to accomplish the following objectives

1 correct simple errors and insure that the appraisal records are correct 2 insure the appraisal takes into account all pertinent factors 3 identify specific issues the owner is concerned about 4 ascertain the owners opinion of property value 5 increase the owners understanding of assessment administration

39

The district follows the rules and procedures adopted by the appraisal review board for formal hearings In the formal process all property types are represented by the director of appraisal and deputy chief of appraisal and any other staff knowledgeable of the property All evidence is reviewed and verified for accuracy and completeness prior to being presented to the board All evidence presented by the district staff members is under oath

The district makes available all information required by Sect 41461 if requested by the property owner The districts defense of unequal appraisal on all property types in formal hearings is done in accordance with Sect 4143 (b) of the property tax code

THE MASS APPRAISAL REPORT

Each Tax Year the mass appraisal report is prepared and certified by the chief appraiser at the conclusion of the appraisal phase of the ad valorem tax calendar (on or about April 1st or as soon as practical) The mass appraisal report is completed in compliance with USPAP Standard Rule 6-8 The signed certification by the chief appraiser is compliant with USPAP Standard Rule 6-9 The reappraisal plan is referenced in the districts mass appraisal report and together provides the public an overall understanding of the full appraisal process Whereas each document stands alone both must be considered in relaying the districts completion of the property tax year and the mandated requirements

40

limiting Conditions

The appraisal review plan provided by the district is subject to the following conditions

1 The appraisal process is prepared and conducted exclusively for ad valorem tax purposes 2 The property characteristic data upon which the appraisals are based is through exterior inspections and limited to the staff resources 3 Validation of sales transactions is attempted through questionnaires to buyer and seller and through vendors and is considered reliable however is not guaranteed andor warranted by the district 4 Below is a list of staff providing significant assistance to the person signing this certification statement

Certification Statement

Cheryl Evans Chief Appraiser for Brazoria County Appraisal District solemnly swear that have made or caused to be made a reappraisal plan for Brazoria County Appraisal District for the 20162017 tax years as required by state law

Ch~2~ Chief Appraiser Brazoria County Appraisal District

BCAD Staff key in reappraisal planning

AI Baird Deputy Chief of Administration Preston Brown Deputy Chief of Appraisal Nancy Ashburn Director of Appraisal Operations

BeAD Staff key in reappraisal implementation Steven Holtz Project Manager Jennifer Warren Residential Manager John Varner Commercial Manager Laura Thoede BPP Supervisor Coy Cooksey Land Manager Patrick Whittenburg New Construction Manager

41

MASS APPRAISAL FLOW CHART

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42

BCAD 2016-2017 APPRAISAL CALENDAR

AUGUST 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Track TDLR education courses for registrant training

bull Review litigated accounts

bull Prepare arbitrations bull Continue informal protest meetings and formal hearings bull Electronic Property Transaction submission to PTAD

bull Supplemental roll bull Create new year layer in CAMA system

bull Conduct appraiser training

bull Strategy meetings with residential land and commercial managers

bull Update aerial overlay bull Begin in-house discovery process and appraisal updates bull Run ratio study of certified values by strata bull Begin preparing fieldwork for all reappraisal types (Residential Land Commercial

BPP AG)

SEPTEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Begin residential field inspections of properties identified for a reappraisal year bull Begin personal property discovery and prepare on-site verification list

43

bull Begin account by account review of commercial properties in school districts designated for reappraisal

bull Electronic Appraisals Roll Submission to PTAD bull Complete quarterly contacts of apartments

bull Supplement the roll bull Begin adding residential new construction

bull Continue in-house review of accounts using aerial imagery bull Begin first phase of land re-evaluation using allocationabstraction method

bull Begin AG field inspections

OCTOBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Supplement the roll bull Continue adding residential new construction

bull Continue in-house review of accounts using aerial imagery

bull Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin data entry and quality control of processed fieldwork bull Begin review and update of land sales bull Establish benchmarks for delineated neighborhoods

bull Continue AG checks bull Generate AG questionnaires wildlife applications q

NOVEM BER 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

44

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

property to property Computerized valuation programs apply this data to determine the value of each property uniformly and without exception A modern computerized mass appraisal system contains many checks and balances to catch inequality before it ever becomes a problem

Nevertheless while the kind of inequality the drafters of the tax code were thinking about simply doesnt exist any more there are occasional instances where minor inequality may appear to exist

Steps to insure equity of appraisals based on an equity protest include 1) determining the market value of a subject property based on sales in a delineated neighborhood 2) calculating the property appraisal ratio to determine the median appraisal ratio and 3) making a final determination for the subject property by applying that median percentage to the overall market value

VALUE DEFENSE OVERVIEW

Sect 4143 of the Texas Property Tax Code places the burden of proof on the appraisal district in protests regarding over-appraisal and unequal appraisal Evidence to be used by the district to meet this burden of proof for market value and equity in formal appraisal review board hearings is specified and tested A number of value defense issues apply to all property types Regardless of the nature of the protests or the type of property the district attempts to informally resolve all protests before they are scheduled for an appraisal review board hearing

The informal meeting process is seen as an opportunity to accomplish the following objectives

1 correct simple errors and insure that the appraisal records are correct 2 insure the appraisal takes into account all pertinent factors 3 identify specific issues the owner is concerned about 4 ascertain the owners opinion of property value 5 increase the owners understanding of assessment administration

39

The district follows the rules and procedures adopted by the appraisal review board for formal hearings In the formal process all property types are represented by the director of appraisal and deputy chief of appraisal and any other staff knowledgeable of the property All evidence is reviewed and verified for accuracy and completeness prior to being presented to the board All evidence presented by the district staff members is under oath

The district makes available all information required by Sect 41461 if requested by the property owner The districts defense of unequal appraisal on all property types in formal hearings is done in accordance with Sect 4143 (b) of the property tax code

THE MASS APPRAISAL REPORT

Each Tax Year the mass appraisal report is prepared and certified by the chief appraiser at the conclusion of the appraisal phase of the ad valorem tax calendar (on or about April 1st or as soon as practical) The mass appraisal report is completed in compliance with USPAP Standard Rule 6-8 The signed certification by the chief appraiser is compliant with USPAP Standard Rule 6-9 The reappraisal plan is referenced in the districts mass appraisal report and together provides the public an overall understanding of the full appraisal process Whereas each document stands alone both must be considered in relaying the districts completion of the property tax year and the mandated requirements

40

limiting Conditions

The appraisal review plan provided by the district is subject to the following conditions

1 The appraisal process is prepared and conducted exclusively for ad valorem tax purposes 2 The property characteristic data upon which the appraisals are based is through exterior inspections and limited to the staff resources 3 Validation of sales transactions is attempted through questionnaires to buyer and seller and through vendors and is considered reliable however is not guaranteed andor warranted by the district 4 Below is a list of staff providing significant assistance to the person signing this certification statement

Certification Statement

Cheryl Evans Chief Appraiser for Brazoria County Appraisal District solemnly swear that have made or caused to be made a reappraisal plan for Brazoria County Appraisal District for the 20162017 tax years as required by state law

Ch~2~ Chief Appraiser Brazoria County Appraisal District

BCAD Staff key in reappraisal planning

AI Baird Deputy Chief of Administration Preston Brown Deputy Chief of Appraisal Nancy Ashburn Director of Appraisal Operations

BeAD Staff key in reappraisal implementation Steven Holtz Project Manager Jennifer Warren Residential Manager John Varner Commercial Manager Laura Thoede BPP Supervisor Coy Cooksey Land Manager Patrick Whittenburg New Construction Manager

41

MASS APPRAISAL FLOW CHART

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42

BCAD 2016-2017 APPRAISAL CALENDAR

AUGUST 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Track TDLR education courses for registrant training

bull Review litigated accounts

bull Prepare arbitrations bull Continue informal protest meetings and formal hearings bull Electronic Property Transaction submission to PTAD

bull Supplemental roll bull Create new year layer in CAMA system

bull Conduct appraiser training

bull Strategy meetings with residential land and commercial managers

bull Update aerial overlay bull Begin in-house discovery process and appraisal updates bull Run ratio study of certified values by strata bull Begin preparing fieldwork for all reappraisal types (Residential Land Commercial

BPP AG)

SEPTEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Begin residential field inspections of properties identified for a reappraisal year bull Begin personal property discovery and prepare on-site verification list

43

bull Begin account by account review of commercial properties in school districts designated for reappraisal

bull Electronic Appraisals Roll Submission to PTAD bull Complete quarterly contacts of apartments

bull Supplement the roll bull Begin adding residential new construction

bull Continue in-house review of accounts using aerial imagery bull Begin first phase of land re-evaluation using allocationabstraction method

bull Begin AG field inspections

OCTOBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Supplement the roll bull Continue adding residential new construction

bull Continue in-house review of accounts using aerial imagery

bull Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin data entry and quality control of processed fieldwork bull Begin review and update of land sales bull Establish benchmarks for delineated neighborhoods

bull Continue AG checks bull Generate AG questionnaires wildlife applications q

NOVEM BER 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

44

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

The district follows the rules and procedures adopted by the appraisal review board for formal hearings In the formal process all property types are represented by the director of appraisal and deputy chief of appraisal and any other staff knowledgeable of the property All evidence is reviewed and verified for accuracy and completeness prior to being presented to the board All evidence presented by the district staff members is under oath

The district makes available all information required by Sect 41461 if requested by the property owner The districts defense of unequal appraisal on all property types in formal hearings is done in accordance with Sect 4143 (b) of the property tax code

THE MASS APPRAISAL REPORT

Each Tax Year the mass appraisal report is prepared and certified by the chief appraiser at the conclusion of the appraisal phase of the ad valorem tax calendar (on or about April 1st or as soon as practical) The mass appraisal report is completed in compliance with USPAP Standard Rule 6-8 The signed certification by the chief appraiser is compliant with USPAP Standard Rule 6-9 The reappraisal plan is referenced in the districts mass appraisal report and together provides the public an overall understanding of the full appraisal process Whereas each document stands alone both must be considered in relaying the districts completion of the property tax year and the mandated requirements

40

limiting Conditions

The appraisal review plan provided by the district is subject to the following conditions

1 The appraisal process is prepared and conducted exclusively for ad valorem tax purposes 2 The property characteristic data upon which the appraisals are based is through exterior inspections and limited to the staff resources 3 Validation of sales transactions is attempted through questionnaires to buyer and seller and through vendors and is considered reliable however is not guaranteed andor warranted by the district 4 Below is a list of staff providing significant assistance to the person signing this certification statement

Certification Statement

Cheryl Evans Chief Appraiser for Brazoria County Appraisal District solemnly swear that have made or caused to be made a reappraisal plan for Brazoria County Appraisal District for the 20162017 tax years as required by state law

Ch~2~ Chief Appraiser Brazoria County Appraisal District

BCAD Staff key in reappraisal planning

AI Baird Deputy Chief of Administration Preston Brown Deputy Chief of Appraisal Nancy Ashburn Director of Appraisal Operations

BeAD Staff key in reappraisal implementation Steven Holtz Project Manager Jennifer Warren Residential Manager John Varner Commercial Manager Laura Thoede BPP Supervisor Coy Cooksey Land Manager Patrick Whittenburg New Construction Manager

41

MASS APPRAISAL FLOW CHART

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42

BCAD 2016-2017 APPRAISAL CALENDAR

AUGUST 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Track TDLR education courses for registrant training

bull Review litigated accounts

bull Prepare arbitrations bull Continue informal protest meetings and formal hearings bull Electronic Property Transaction submission to PTAD

bull Supplemental roll bull Create new year layer in CAMA system

bull Conduct appraiser training

bull Strategy meetings with residential land and commercial managers

bull Update aerial overlay bull Begin in-house discovery process and appraisal updates bull Run ratio study of certified values by strata bull Begin preparing fieldwork for all reappraisal types (Residential Land Commercial

BPP AG)

SEPTEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Begin residential field inspections of properties identified for a reappraisal year bull Begin personal property discovery and prepare on-site verification list

43

bull Begin account by account review of commercial properties in school districts designated for reappraisal

bull Electronic Appraisals Roll Submission to PTAD bull Complete quarterly contacts of apartments

bull Supplement the roll bull Begin adding residential new construction

bull Continue in-house review of accounts using aerial imagery bull Begin first phase of land re-evaluation using allocationabstraction method

bull Begin AG field inspections

OCTOBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Supplement the roll bull Continue adding residential new construction

bull Continue in-house review of accounts using aerial imagery

bull Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin data entry and quality control of processed fieldwork bull Begin review and update of land sales bull Establish benchmarks for delineated neighborhoods

bull Continue AG checks bull Generate AG questionnaires wildlife applications q

NOVEM BER 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

44

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

limiting Conditions

The appraisal review plan provided by the district is subject to the following conditions

1 The appraisal process is prepared and conducted exclusively for ad valorem tax purposes 2 The property characteristic data upon which the appraisals are based is through exterior inspections and limited to the staff resources 3 Validation of sales transactions is attempted through questionnaires to buyer and seller and through vendors and is considered reliable however is not guaranteed andor warranted by the district 4 Below is a list of staff providing significant assistance to the person signing this certification statement

Certification Statement

Cheryl Evans Chief Appraiser for Brazoria County Appraisal District solemnly swear that have made or caused to be made a reappraisal plan for Brazoria County Appraisal District for the 20162017 tax years as required by state law

Ch~2~ Chief Appraiser Brazoria County Appraisal District

BCAD Staff key in reappraisal planning

AI Baird Deputy Chief of Administration Preston Brown Deputy Chief of Appraisal Nancy Ashburn Director of Appraisal Operations

BeAD Staff key in reappraisal implementation Steven Holtz Project Manager Jennifer Warren Residential Manager John Varner Commercial Manager Laura Thoede BPP Supervisor Coy Cooksey Land Manager Patrick Whittenburg New Construction Manager

41

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42

BCAD 2016-2017 APPRAISAL CALENDAR

AUGUST 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Track TDLR education courses for registrant training

bull Review litigated accounts

bull Prepare arbitrations bull Continue informal protest meetings and formal hearings bull Electronic Property Transaction submission to PTAD

bull Supplemental roll bull Create new year layer in CAMA system

bull Conduct appraiser training

bull Strategy meetings with residential land and commercial managers

bull Update aerial overlay bull Begin in-house discovery process and appraisal updates bull Run ratio study of certified values by strata bull Begin preparing fieldwork for all reappraisal types (Residential Land Commercial

BPP AG)

SEPTEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Begin residential field inspections of properties identified for a reappraisal year bull Begin personal property discovery and prepare on-site verification list

43

bull Begin account by account review of commercial properties in school districts designated for reappraisal

bull Electronic Appraisals Roll Submission to PTAD bull Complete quarterly contacts of apartments

bull Supplement the roll bull Begin adding residential new construction

bull Continue in-house review of accounts using aerial imagery bull Begin first phase of land re-evaluation using allocationabstraction method

bull Begin AG field inspections

OCTOBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Supplement the roll bull Continue adding residential new construction

bull Continue in-house review of accounts using aerial imagery

bull Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin data entry and quality control of processed fieldwork bull Begin review and update of land sales bull Establish benchmarks for delineated neighborhoods

bull Continue AG checks bull Generate AG questionnaires wildlife applications q

NOVEM BER 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

44

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

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42

BCAD 2016-2017 APPRAISAL CALENDAR

AUGUST 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Track TDLR education courses for registrant training

bull Review litigated accounts

bull Prepare arbitrations bull Continue informal protest meetings and formal hearings bull Electronic Property Transaction submission to PTAD

bull Supplemental roll bull Create new year layer in CAMA system

bull Conduct appraiser training

bull Strategy meetings with residential land and commercial managers

bull Update aerial overlay bull Begin in-house discovery process and appraisal updates bull Run ratio study of certified values by strata bull Begin preparing fieldwork for all reappraisal types (Residential Land Commercial

BPP AG)

SEPTEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Begin residential field inspections of properties identified for a reappraisal year bull Begin personal property discovery and prepare on-site verification list

43

bull Begin account by account review of commercial properties in school districts designated for reappraisal

bull Electronic Appraisals Roll Submission to PTAD bull Complete quarterly contacts of apartments

bull Supplement the roll bull Begin adding residential new construction

bull Continue in-house review of accounts using aerial imagery bull Begin first phase of land re-evaluation using allocationabstraction method

bull Begin AG field inspections

OCTOBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Supplement the roll bull Continue adding residential new construction

bull Continue in-house review of accounts using aerial imagery

bull Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin data entry and quality control of processed fieldwork bull Begin review and update of land sales bull Establish benchmarks for delineated neighborhoods

bull Continue AG checks bull Generate AG questionnaires wildlife applications q

NOVEM BER 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

44

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

BCAD 2016-2017 APPRAISAL CALENDAR

AUGUST 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Track TDLR education courses for registrant training

bull Review litigated accounts

bull Prepare arbitrations bull Continue informal protest meetings and formal hearings bull Electronic Property Transaction submission to PTAD

bull Supplemental roll bull Create new year layer in CAMA system

bull Conduct appraiser training

bull Strategy meetings with residential land and commercial managers

bull Update aerial overlay bull Begin in-house discovery process and appraisal updates bull Run ratio study of certified values by strata bull Begin preparing fieldwork for all reappraisal types (Residential Land Commercial

BPP AG)

SEPTEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data

bull Collect and input building permits fire reports demolition reports and manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Begin residential field inspections of properties identified for a reappraisal year bull Begin personal property discovery and prepare on-site verification list

43

bull Begin account by account review of commercial properties in school districts designated for reappraisal

bull Electronic Appraisals Roll Submission to PTAD bull Complete quarterly contacts of apartments

bull Supplement the roll bull Begin adding residential new construction

bull Continue in-house review of accounts using aerial imagery bull Begin first phase of land re-evaluation using allocationabstraction method

bull Begin AG field inspections

OCTOBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Supplement the roll bull Continue adding residential new construction

bull Continue in-house review of accounts using aerial imagery

bull Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin data entry and quality control of processed fieldwork bull Begin review and update of land sales bull Establish benchmarks for delineated neighborhoods

bull Continue AG checks bull Generate AG questionnaires wildlife applications q

NOVEM BER 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

44

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

bull Begin account by account review of commercial properties in school districts designated for reappraisal

bull Electronic Appraisals Roll Submission to PTAD bull Complete quarterly contacts of apartments

bull Supplement the roll bull Begin adding residential new construction

bull Continue in-house review of accounts using aerial imagery bull Begin first phase of land re-evaluation using allocationabstraction method

bull Begin AG field inspections

OCTOBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings bull Continue fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Supplement the roll bull Continue adding residential new construction

bull Continue in-house review of accounts using aerial imagery

bull Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin data entry and quality control of processed fieldwork bull Begin review and update of land sales bull Establish benchmarks for delineated neighborhoods

bull Continue AG checks bull Generate AG questionnaires wildlife applications q

NOVEM BER 2016

bull Collect verify and process sales information bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

44

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Prepare arbitrations bull Continue formal hearings

bull Complete fieldwork preparation bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Continue account by account review of commercial properties in school districts designated for reappraisal

bull Begin adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run ratio study to verify and update cost schedules

bull Run land sale ratio study to plan special projects

bull Print next appraisals bull First run of requests for updated agricultural applications and new owner application

DECEMBER 2016

bull Collect verify and process sales information

bull Review commercial publications and gather market data bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels bull Complete 2015 formal hearings

bull Process lists for percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll bull Continue in-house review of accounts using aerial imagery bull Continue data entry and quality control of processed fieldwork bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Continue AG checks

45

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

bull Complete foreclosure analysis to determine effects (if any) on market

bull Print next appraisals

JANUARY 2017

bull Collect verify and process sales information

bull Analysis of appropriate adjustments

bull Ratio study of last quarter sales by type bull Ratio study by strata and type bull Collect and input building permits fire reports demolition reports and

manufactured reports

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA bull Discovery of agricultural land change of use bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Begin income analysis for commercial department

bull Continue adding new commercial construction bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities

bull Run land sale ratio study to plan special projects

bull Begin equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Print next appraisals bull Process work flow lists for appraisers bull Mail personal property renditions bull Second run of requests for updated agricultural applications and new owner

applications

bull Complete AG field inspections bull Begin cap rate analysis for income producing properties

FEBRUARY 2017

bull Calculate productivity values bull Collect verify and process sales information bull Ratio study of last quarter sales by type bull Ratio study by strata and type

46

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

bull Update real property ownership as deeds are filed

bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use

bull Process partial exemptions bull Create merges and splits for land parcels

bull Complete 2015 formal hearings

bull Complete percent complete and photo drive-by bull Continue residential field inspections of properties identified for a reappraisal year

bull Continue personal property discovery and prepare on-site verification list

bull Complete commercial data entry bull Continue income analysis for commercial department

bull Continue adding new commercial construction

bull Supplement the roll as necessary bull Continue in-house review of accounts using aerial imagery

bull Continue data entry and quality control of processed fieldwork

bull Run ratio study to monitor reappraisal activities bull Run land sale ratio study to plan special projects

bull Continue equity analysis of commercial properties by type Quarterly cold-calling of apartment managers for rates vacancy etc

bull Begin Neighborhood Analysis

bull Begin equity analysis of residential properties

bull Print next appraisals bull Process work flow lists for appraisers

bull Begin processing personal property renditions

bull Continue cap rate analysis for income producing properties

bull Begin re-value of apartments and hotels

bull Electronic Property Transaction submission to PTAD

bull Second run of requests for updated agricultural applications and new owner application

MARCH 2017

bull AG board meets bull Conduct Urban Rancher AG Program

bull Collate sales information for value defense bull Final ratio studies prior to notices

bull Update real property ownership as deeds are filed bull Update manufactured home ownership processed through TDHCA

bull Discovery of agricultural land change of use bull Process partial exemptions bull Finalize merges and splits for land parcels effective January 1st bull Initiate error reports lossgain reports and equity checks on residential properties

bull Continue residential field inspections as needed bull Complete commercial income analysis

bull Supplement the roll as necessary

47

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

bull Begin in-house training for appeals

bull Continue data entry and quality control of processed fieldwork

bull Complete Neighborhood Analysis

bull Process personal property renditions

bull Complete re-value of apartments and hotels bull Verify commercial values run lossgain and error reports

bull Complete AG inspectionsprocess applications

APRIL 2017

bull Collate sales information for value defense

bull Finalize merges and splits for land parcels effective January 1st

bull Continue error reports lossgain reports and equity checks on all property types

bull Verify all checkspermits complete

bull Begin AG checks bull Call BPP accounts that failed to render

bull Supplement the roll as necessary bull Continue in-house training for appeals

bull Finish data entry and quality control of processed fieldwork

bull Process personal property renditions

bull Process and send first batch of 2519 notices

bull Process exemption applications bull Estimates to applicable entities

bull Begin non-scheduled informal appeal meetings Complete AG inspectionsprocess applications

bull Continue process of AG applications

MAY 2017

bull Begin scheduled informal appeal meetings

bull Generate AG denials bull Process personal property renditions

bull Complete AG checks bull Supplement the roll as necessary

bull Turn records over to ARB

bull Begin formal hearing schedule

bull Process second batch of 2519 notices bull Load mineral import from contracted appraisal firm bull Process late applications

JUNE 2017

bull Scheduled informal appeal meetings

bull Process personal property renditions bull Supplement the roll as necessary

48

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49

bull Process rendition penalty letters

bull Continue formal hearing schedule

bull Process in-house 2519 and corrected notices

bull Field inspections for late AG applications

JULY 2017

bull Scheduled informal appeal meetings

bull Supplement the roll as necessary

bull Continue formal hearing schedule

bull Certify Appraisal Roll

49